Operations

First Quarter Update

Tertiary Rift — Kenya

Exploration and Appraisal (Blocks 10BB and 13T)

Following the agreement of the terms of The Petroleum Bill, the transfer of stored crude oil from Turkana to Mombasa by road commenced on 3 June 2018 and continued, with trucks transporting approximately 600 bopd. To date, approximately 88,000 barrels of oil has been transported to Mombasa. The volume of oil transported by truck is expected to increase to 2,000 bopd once the Early Oil Production System is fully operational from the Amosing temporary production facility and Regulatory Authority approval is received. The first lifting of sweet Kenyan crude oil stored in Mombasa is expected in the second half of 2019.

Africa Oil Corp. has a 25% working interest in Blocks 10BB and 13T with Tullow Oil plc (50% and Operator) and Total (25%) holding the remaining interests.

Field Development (Blocks 10BB and 13T)

Since January 2018, work to deliver on the agreed development plan has been underway with strong alignment between the Government of Kenya and the Joint Venture Partners. The initial development is planned to include a 60,000 to 80,000 barrels of oil per day (bopd) Central Processing Facility (CPF) and an export pipeline to Lamu, some 750 kilometers from the South Lokichar basin on the Kenyan coast. This approach is expected to bring significant benefits as it enables an earlier Final Investment Decision (FID) of the Amosing, Ngamia and Twiga fields, providing the best opportunity to deliver first oil in a timeline that meets the Government of Kenya expectations. The installed infrastructure can then be utilized for the optimization of the remaining and yet to be discovered South Lokichar oil fields, allowing the incremental development of these fields to be completed in an efficient and lower cost manner post first oil. Additional stages of development are expected to increase plateau production to 100,000 bopd or greater. Upstream Front End Engineering and Design ("FEED") has been largely completed by WorleyParsons and Environmental and Social Impact Assessment ("ESIA") work on the upstream is well underway.

A Joint Development Agreement ("JDA"), setting out a structure for the Government of Kenya and the Kenya Joint Venture Partners to progress the development of the export pipeline, was signed on 25 October, 2017. The associated Midstream FEED, awarded to Wood Group, is largely complete and the associated ESIA is nearing completion, studies on pipeline financing and ownership, are expected to continue throughout 2019.

Discussions with the Government of Kenya regarding key commercial agreements are progressing.

Exploration Block 10BA

During 2017, the Joint Venture Partners entered the Second Additional Exploration Period on Block 10BA.

Tertiary Rift — Ethiopia

The Company is continuing to seek joint venture partners to farmin to its 100% interest in the Rift Basin Area (Ethiopia). The Ethiopian government has granted an extension of the current exploration period until August 2019. A $4.9 million impairment of previously capitalized intangible exploration assets was recorded in 2018 related to the Company's operations in Ethiopia.