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© 2014 Gaffney, Cline & Associates. All rights reserved. Terms and conditions of use: by accepting this document, the recipient agrees that the document together with all information included therein is the confidential and proprietary property of

Gaffney, Cline & Associates and includes valuable trade secrets and/or proprietary information of Gaffney, Cline & Associates (collectively "information"). Gaffney, Cline & Associates retains all rights under copyright laws and trade secret laws of the

United States of America and other countries. The recipient further agrees that the document may not be distributed, transmitted, copied or reproduced in whole or in part by any means, electronic, mechanical, or otherwise, without the express prior

written consent of Gaffney, Cline & Associates, and may not be used directly or indirectly in any way detrimental to Gaffney, Clines & Associates’ interest.

David Jarrett

Oil Discoveries in the East African Rift

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East African Rift System (EARS) Tectonic Elements

▪ Linked intra continental rift

▪ Extends 3,500 km across eastern Africa and is in the order of 50 km to 150 km wide

▪ The EARS can be separated into two dominant trends

– Eastern Branch: Afar – North Tanzanian Divergence, initiated early Miocene (20 Ma) is more volcanic

– Western Branch: Albertine Rift – Malawi Rift, initiated late Miocene (10 Ma) contains lakes

Source: Chorowicz 2005

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The Formation of the EARS

▪ Elevated heat flow from the asthenosphere generates a thermal bulge (domes) leading to earthquakes, volcanic eruptions (flood basalts)

▪ This upwelling results in divergence of the plate boundaries, resulting in faults and fractures, rifts form and are filled with sediments

▪ Heat and burial matures organic rich source rocks, which expel hydrocarbons

DEM Data Source: NASA

Kenya

Dome

Ethiopian

Dome

Somalian

Plate

Nubian

(African)

Plate

Arabian

Plate

Research Machines PLC

0 500 km

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Oil Discoveries EARS

Source: Petroview

BurundiBurundiBurundiBurundiBurundiBurundiBurundiBurundiBurundi

TanzaniaTanzaniaTanzaniaTanzaniaTanzaniaTanzaniaTanzaniaTanzaniaTanzania

UgandaUgandaUgandaUgandaUgandaUgandaUgandaUgandaUganda

South SudanSouth SudanSouth SudanSouth SudanSouth SudanSouth SudanSouth SudanSouth SudanSouth Sudan

EthiopiaEthiopiaEthiopiaEthiopiaEthiopiaEthiopiaEthiopiaEthiopiaEthiopia

DjiboutiDjiboutiDjiboutiDjiboutiDjiboutiDjiboutiDjiboutiDjiboutiDjibouti

SomaliaSomaliaSomaliaSomaliaSomaliaSomaliaSomaliaSomaliaSomalia

RwandaRwandaRwandaRwandaRwandaRwandaRwandaRwandaRwanda

KenyaKenyaKenyaKenyaKenyaKenyaKenyaKenyaKenya

ZambiaZambiaZambiaZambiaZambiaZambiaZambiaZambiaZambia

MalawiMalawiMalawiMalawiMalawiMalawiMalawiMalawiMalawi

MozambiqueMozambiqueMozambiqueMozambiqueMozambiqueMozambiqueMozambiqueMozambiqueMozambique

MadagascarMadagascarMadagascarMadagascarMadagascarMadagascarMadagascarMadagascarMadagascar

SeychellesSeychellesSeychellesSeychellesSeychellesSeychellesSeychellesSeychellesSeychelles

MoroniMoroniMoroniMoroniMoroniMoroniMoroniMoroniMoroni

DodomaDodomaDodomaDodomaDodomaDodomaDodomaDodomaDodoma

JubaJubaJubaJubaJubaJubaJubaJubaJuba

MamoudzouMamoudzouMamoudzouMamoudzouMamoudzouMamoudzouMamoudzouMamoudzouMamoudzou

LusakaLusakaLusakaLusakaLusakaLusakaLusakaLusakaLusaka

HarareHarareHarareHarareHarareHarareHarareHarareHarare

NairobiNairobiNairobiNairobiNairobiNairobiNairobiNairobiNairobi

MogadishuMogadishuMogadishuMogadishuMogadishuMogadishuMogadishuMogadishuMogadishu

Addis AbabaAddis AbabaAddis AbabaAddis AbabaAddis AbabaAddis AbabaAddis AbabaAddis AbabaAddis Ababa

0 450.0

kilometres

CONGO, THE DEMOCRATIC REPUBLIC OF THECONGO, THE DEMOCRATIC REPUBLIC OF THECONGO, THE DEMOCRATIC REPUBLIC OF THECONGO, THE DEMOCRATIC REPUBLIC OF THECONGO, THE DEMOCRATIC REPUBLIC OF THECONGO, THE DEMOCRATIC REPUBLIC OF THECONGO, THE DEMOCRATIC REPUBLIC OF THECONGO, THE DEMOCRATIC REPUBLIC OF THECONGO, THE DEMOCRATIC REPUBLIC OF THE

FRANCEFRANCEFRANCEFRANCEFRANCEFRANCEFRANCEFRANCEFRANCE

KIRIBATIKIRIBATIKIRIBATIKIRIBATIKIRIBATIKIRIBATIKIRIBATIKIRIBATIKIRIBATI

UNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDS

UGANDAUGANDAUGANDAUGANDAUGANDAUGANDAUGANDAUGANDAUGANDA

BLOCK IVBLOCK IVBLOCK IVBLOCK IVBLOCK IVBLOCK IVBLOCK IVBLOCK IVBLOCK IV

EA4AEA4AEA4AEA4AEA4AEA4AEA4AEA4AEA4A

EA5BEA5BEA5BEA5BEA5BEA5BEA5BEA5BEA5B

EA1AEA1AEA1AEA1AEA1AEA1AEA1AEA1AEA1A

PAARAPAARAPAARAPAARAPAARAPAARAPAARAPAARAPAARA

EA3BEA3BEA3BEA3BEA3BEA3BEA3BEA3BEA3B

EA3AEA3AEA3AEA3AEA3AEA3AEA3AEA3AEA3A

BLOCK IIBLOCK IIBLOCK IIBLOCK IIBLOCK IIBLOCK IIBLOCK IIBLOCK IIBLOCK II

EA3CEA3CEA3CEA3CEA3CEA3CEA3CEA3CEA3C

EA3DEA3DEA3DEA3DEA3DEA3DEA3DEA3DEA3D

EA2EA2EA2EA2EA2EA2EA2EA2EA2

BLOCK IBLOCK IBLOCK IBLOCK IBLOCK IBLOCK IBLOCK IBLOCK IBLOCK I

BULIISABULIISABULIISABULIISABULIISABULIISABULIISABULIISABULIISA

EA5AEA5AEA5AEA5AEA5AEA5AEA5AEA5AEA5A

KAISO-TONYAKAISO-TONYAKAISO-TONYAKAISO-TONYAKAISO-TONYAKAISO-TONYAKAISO-TONYAKAISO-TONYAKAISO-TONYA

BLOCK IIIBLOCK IIIBLOCK IIIBLOCK IIIBLOCK IIIBLOCK IIIBLOCK IIIBLOCK IIIBLOCK III

25.000

kilometres

BLOCK 10BBBLOCK 10BBBLOCK 10BBBLOCK 10BBBLOCK 10BBBLOCK 10BBBLOCK 10BBBLOCK 10BBBLOCK 10BBBLOCK 13TBLOCK 13TBLOCK 13TBLOCK 13TBLOCK 13TBLOCK 13TBLOCK 13TBLOCK 13TBLOCK 13T

BLOCK 12ABLOCK 12ABLOCK 12ABLOCK 12ABLOCK 12ABLOCK 12ABLOCK 12ABLOCK 12ABLOCK 12A

AGETE

TWIGA SOUTH

EKALES

ETUKO

AMOSING

NGAMIA

FRANCEFRANCEFRANCEFRANCEFRANCEFRANCEFRANCEFRANCEFRANCE

KENYAKENYAKENYAKENYAKENYAKENYAKENYAKENYAKENYA

KIRIBATIKIRIBATIKIRIBATIKIRIBATIKIRIBATIKIRIBATIKIRIBATIKIRIBATIKIRIBATI

UNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDSUNITED STATES MINOR OUTLYING ISLANDS

UGANDAUGANDAUGANDAUGANDAUGANDAUGANDAUGANDAUGANDAUGANDA

BLOCK 11ABLOCK 11ABLOCK 11ABLOCK 11ABLOCK 11ABLOCK 11ABLOCK 11ABLOCK 11ABLOCK 11A

BLOCK 10BABLOCK 10BABLOCK 10BABLOCK 10BABLOCK 10BABLOCK 10BABLOCK 10BABLOCK 10BABLOCK 10BA

BLOCK 10ABLOCK 10ABLOCK 10ABLOCK 10ABLOCK 10ABLOCK 10ABLOCK 10ABLOCK 10ABLOCK 10A

LOPEROT

0 25.00

kilometres

South Lokichar Basin, Kenya

Lake Albert Rift Basin, Uganda

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Albert Rift Basin – Topography

11

Albert Basin topography fields prospect map...

Block boundaries

Prospects

Fields

Wells

A

B

C

D

E

C

B

A

D

E

© 2013 Gaffney Cline & Associates. All Rights Reserved. Data Source: NASA and Petroview

Asymmetric Rift

Continued extension generates

active faults and topography

Rwenzori / Mountains of the Moon

Digital Elevation Model

0 100 km

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Albert Rift Basin – Tectonic Elements & Structural Style

Source: Petroleum Exploration and Production Department, 2012 Interpretation 9 © 2013 Gaffney Cline & Associates. All Rights Reserved.

Albert Basin Structural Elements

From Petroleum Exploration

and Production Department,

2012

TONYA

FAULT

NORTH TORO

BUNYORO FAULT

PAKWACH

BASIN

RHINO-CAMP

BASIN

15

Pakwach Basin

Petroleum Exploration and Production

Department, 2012 Interpretation

© 2013 Gaffney Cline & Associates. All Rights Reserved.

13

Regional Seismic Line Through Albert Basin

From Heritage Oil

© 2013 Gaffney Cline & Associates. All Rights Reserved.

14

Southern Lake Albert Basin

Petroleum Exploration and Production

Department, 2012 Interpretation

© 2013 Gaffney Cline & Associates. All Rights Reserved.

Source: Heritage

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Lake Albert Hydrocarbon Potential Identified in 1920’s

DRC

Uganda

Alluvial Fan

Low Sinuosity

Channels

Rift Scarp

Semliki Delta

Incised

Channel

Delta

Natural oil

film on Nile

at Paraa

Kibiro Oil Seep

Butiaba

Oil Seeps

SAR slicks

Kibuku Oil Seep

Semliki

Waki B1 1938

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Stratigraphy – Waki B1 1938

▪ Waki B1 drilled in 1938 by Anglo European Investment Company of South Africa

▪ Late Miocene to Recent

– Miocene and Pliocene bituminous

shales and sandstones

– 6-7% TOC in shales below 750 m, extractable oil

– Pleistocene Conglomerates sandstones and shales

– Holocene lakebed deposits

▪ Additional stratigraphic wells were drilled based on oil seeps

Source: Karp et al 2012

Albert Basin Stratigraphy

• Late Miocene to Recent

– Miocene & Pliocene bituminous

shales and sandstones

• 6-7% TOC in shales below 750m

– Pleistocene Conglomerates,

sandstones and shales

– Holocene lakebed deposits

• Waki-1 well (1937)

17 © 2012 Gaffney Cline & Associates. All Rights Reserved.

From Karp et al., 2012

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Exploration History - Modern Efforts to First Discovery

▪ 1983 – Acquisition of Aeromagnetic data over the entire Albertine Graben

▪ 2002-2004 – Heritage Oil drilled Turaco 1, 2 and 3 in the Semliki Basin, dry holes

▪ 2003-2004 – Acquisition of seismic data over Lake Albert

▪ January 2006 – First oil discovery, Mputa-1, closely followed by Waraga-1

Semliki Delta

Turaco 1,2 and 3,

dry holes

Muputa 1, first oil

discovery

Waraga-1, flow test

12,000 bopd

0 20 km

Source: Petroleum Exploration and Production Department, 2012 Interpretation

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Kingfisher Discovery – October 2006, Flow Tested 13,000 bopd, ~ 200 Million Barrel Field

Source: Tullow

Three way dip

closure against

bounding fault

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Albert Basin Burial Depth

Seismic Interpretation: Heritage Oil

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Albert Basin Burial Depth

Based on interpretation by Heritage Oil

0

-500

-1000

-1500

-2000

-2500

-3000

-4000

-5000

-3500

-4500

8 7 6 5 4 3 2 1 0D

ep

th S

ub

su

rface (

m)

8 7 6 5 4 3 2 1 0

Age (my)

Holocene

Late Pleistocene

Late Pliocene

Early Pleistocene

Middle Pliocene

Early Pliocene

Late Miocene

Fm

S

• Very

recent

rapid

burial a

key

success

factor

© 2013 Gaffney Cline & Associates. All Rights Reserved.

13

Regional Seismic Line Through Albert Basin

From Heritage Oil

© 2013 Gaffney Cline & Associates. All Rights Reserved.

Rapid burial and late

hydrocarbon maturation

Mature and

still active

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Lake Albert Bathymetry Mimics Depth to Source Kitchen

▪ Currently active source kitchen

▪ Expulsion of hydrocarbons into reservoir quality rock

▪ Tectonostatigraphic evolution allows play elements to be present

Source: Tullow

Albert bathymetry mimics depth to source kitchen

18

From Tullow Oil, 2012

• Therefore currently active graben with burial allowing generation and

expulsion of oil from the source kitchen

© 2013 Gaffney Cline & Associates. All Rights Reserved.

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Albert Rift Basin Summary

▪ Known hydrocarbon potential dating back to the 1920’s, active source kitchen identified from seeps and also sleeks identified from SAR

▪ Waki B1 drilled in 1938 proved that the play elements exist within the basin (reservoir, organic rich source and seal)

▪ The evolution of the rift basin itself provides the trapping mechanism, structural traps, stratigraphic traps are also viable concepts

▪ Muputa, Waraga and Kingfisher proved the hydrocarbon potential of the basin, generating significant flow rates on test

▪ Aggressive exploration and appraisal has resulted in resources in the region of a billion barrels of oil equivalent

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South Lokichar Basin

▪ The South Lokichar Basin forms part of the Eastern Branch of the EARS

▪ Lies to the southwest of Lake Turkana

Data Source: NASA

Source: AOC

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South Lokichar Basin – Half Graben

Source: AOC

Shell 1992

Entering oil window,

local geothermal

gradient?

2 km

5 km

Source Kitchen

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Loperot -1- 1992

▪ Drilled in 1992 to test a fault closed structural trap on the rift shoulder

▪ Mature source rocks in the deeper section (TOC 1-3%)

▪ High quality reservoir sands encountered, although some sands are affected by post burial diagnosis

▪ Hydrocarbons were discovered in thin bedded sands within the Lockhone Shale, questioning trap integrity

Source AOC

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Schematic Section, South Lokichar Basin, Main Reservoir Types

Source: AOC

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High Quality Auwerwer Reservoir

Source: AOC

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Ngamia & Amosing Discoveries

Source: AOC

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Lokichar Basin Exploration & Appraisal – through 2014

Source: AOC

1

2

3

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South Lokichar Summary

▪ Loperot-1 was drilled in 1992 by Shell, proved the

presence of hydrocarbons in the South Lokichar Basin,

small resource base, thin sands within the Lokhone Shale

▪ Ngamia-1 was drilled by Tullow in 2012 in a fault terrace

juxtaposed against the main bounding fault on the western

side of the basin, encountered high quality Auwerwer

sands

– Waxy crude 25 – 35 deg API

– Five DST’s flowed oil ~ 3,200 bopd

▪ Twiga, Etuko, Amosing and Ageta confirm the potential of

the basin

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Thoughts & Summary

▪ The Albert Rift Basin and the South Lokichar Basin prove the oil potential of the EARS

– Can these models be transferred along the greater EARS?

▪ Sediment influx along the rift will be controlled by accommodation space, environment of deposition (fluvial/alluvial) and provenance of erosion, reservoir quality

▪ Maturation and expulsion of hydrocarbons will be controlled by depth of burial and local geothermal gradients considering upwelling asthenosphere and volcanism

▪ Inversion must be considered (observed in the Rhino Camp Basin) as this has the ability to turn of source rock maturation and generate trap breach (loss of hydrocarbon)

▪ Export routes 1000 km plus, refining (wax removal), cash flow?

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Rwenzori Mountains - “Mountains of the Moon”

Source: http://ecsforum1.wordpress.com/2013/04/02/africas-physical-features/