2011-05-31-2011-05-12

To buy 60% WI in PSA in Puntland region of Somalia.

Africa Oil Corp., Vancouver, (Toronto Venture: AOI) and capital pool company Denovo Capital Corp., Vancouver, (Toronto Venture: DVO-P) plan to form a new E&P company, Puntland Petroleum Corp., to focus on the Puntland region of Somalia.

Puntland Petroleum will be created followings the purchase of Africa Oil's interest in its oil and gas properties in Puntland Somalia by Denovo for approximately C$9.7 million in stock.

Denovo will issue 27.78 million shares in exchange for a 45% participating interest in the Puntland production-sharing agreements. Africa Oil will holds 60% participating interest in the contract following the closing of its deal with Lion Energy Corp., Vancouver, (Toronto Venture: LEO) and is planning a two well exploratory drilling campaign in Puntland, with the first well planned to spud in third quarter.

Pro forma, Africa Oil will hold 54.6% (non-diluted) of the issued and outstanding common shares of Puntland Petroleum.

Africa Oil president Keith Hill says "The creation of Puntland Petroleum allows Africa Oil Corp. to keep a large working interest in a highly prospective exploration project and also provides the necessary capital to pursue an aggressive drilling program. We are in advanced planning stages of a two well drilling program which will drill the first well in a basin that appears to be directly analogous to the rift basins in Southern Yemen that have yielded multi-billion barrels of reserves."