Private contractor to take lead in fixing U.S. health insurance website

The Associated Press Posted: Oct 25, 2013 3:24 PM ET Last Updated: Oct 25, 2013 3:24 PM ET

Nearly a month into the dysfunctional rollout of the U.S. government's new health insurance website, Obama administration officials said Friday they have identified dozens of problems that need fixing and tapped a private company to take the lead in solving them.

Jeffrey Zients, a management consultant brought in by the White House to assess the extent of problems with the HealthCare.gov site, told reporters his review found issues across the entire system, which is made up of layers of components interacting in real time with consumers, government agencies and insurance company computers.

It will take a lot of work, but "HealthCare.gov is fixable," said Zients. The vast majority of the issues will be resolved by the end of November, he said, and there will be many fewer errors. He stopped short of saying the problems will go away completely.

The administration also said it is promoting one of the website contractors, Quality Software Systems Inc., to take on the role of "general contractor" shepherding the fixes. QSSI was responsible for two components of the website, a major linchpin that works relatively well, and an accounts registration feature that froze and caused many of the initial problems.

HealthCare.gov was supposed to be the online portal for uninsured Americans to get coverage under President Barack Obama's health care law. Touted as the equivalent of Amazon.com for health insurance, it became a huge bottleneck immediately upon launch Oct. 1. The flop turned into an embarrassment for Obama and will likely end up as a case study of how government technology programs can go awry.

The briefing from Zients came a day after executives of QSSI and the other major contractor, CGI Federal, a subsidiary of Montreal-based CGI Group, told Congress that the government didn't fully test the system and ordered up last-minute changes that contributed to clogging the system. Next week, Health and Human Services Secretary Kathleen Sebelius is scheduled to testify.

Zients gave some new details about the extent of the problems, but administration officials are still refusing to release any numbers on how many people have successfully enrolled. Although 700,000 have applied for coverage through the new online markets, it's believed only a fraction of that number actually managed to sign up. Prior to the website going live, an administration estimate projected nearly 500,000 people would sign up in October alone.

The marketplaces are the gateway to obtaining health insurance under the new health care law, which requires most Americans to have coverage by Jan. 1. Middle-class people who don't have insurance on the job can purchase a private plan with new tax credits to make the premiums more affordable. Low-income people will be steered to an expanded version of Medicaid in states that agree to extend the safety net program.

The federal government is running the insurance markets or taking the lead in 36 states. The rest were set up by states themselves.

Zeints said almost daily fixes are already having an impact. For example, over 90 per cent of users can now complete one of the first steps, creating an account.

But the application process, which involves submitting and verifying personal information and income details, remains "volatile," he said. At one point, as few as one-third of users were getting through that part.

Zients said there are two big categories of problems. Performance issues involve the speed and reliability of the website. Functional issues are bugs that keep the software from working as intended. He said the government has a "punch list" of needed fixes that add up to dozens in each broad category.

Near the top of the list: insurers are getting enrolments with incomplete, incorrect or duplicate information.

Until now, officials at the federal government's Centers for Medicare and Medicaid Services have taken the lead operational role on HealthCare.gov. The federal agency operate a successful e-commerce site for Medicare coverage, but it appears to have gotten in over its head when it comes to Obama's law. QSSI will now be responsible for the execution.

The company is a subsidiary of UnitedHealth Group, the nation's largest health insurer. It built a component of the website that's called the federal data hub and appears to be working relatively well. The hub is a conduit for verifying consumers' personal information.

An executive of the parent company, Andrew Slavitt, told Congress this week that QSSI had concerns about the federal website and relayed those to the government. Officials said the company's new role as "general contractor" will be an expansion of its current contract.

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Are mom-and-pop variety stores a dying breed?

CBC News Posted: Oct 25, 2013 11:42 AM ET Last Updated: Oct 25, 2013 4:05 PM ET

Is the mom-and-pop convenience store a threatened species?

Things are certainly getting tougher for the independently run dépanneurs and variety stores that dot Canada’s urban landscapes. Since 2008, 2,252 convenience stores have closed across Canada and the majority of those affected were independently owned.

The Canadian Convenience Store Association estimates stores lost $254 million in 2012, compared to profit of $1 billion in 2011.

Independently run convenience stores are finding it harder to survive because of new entrants to the market, high credit card fees and multiple regulations, according to the Canadian Convenience Store Association. (Associated Press)

Its annual state of the industry report points to a more competitive environment for the industry, with big companies such as Shoppers Drug Mart encroaching on the sector after its purchase by Loblaws.

There is also more chain ownership, with companies such as Alimentation Couche-Tard Inc. spreading its footprint. Of the 23,000 convenience stores in Canada, about 45 per cent were independently owned in 2012, down from 48 per cent the previous year.

Alex Scholten, president of the CCSA, said independent stores are getting squeezed, not only by competition, but also by rising credit card fees, contraband tobacco and regulations constraining the industry.

“What we’re seeing is a trend in the industry where the small independents who are not changing or adapting to the Canadian environment are going out of business. The chains are becoming more prevalent in the industry, so we’re seeing a shift in the nature of the industry and who’s in it,” he said in an interview with CBC’s Lang & O’Leary Exchange.

But he believes even small independents can be competitive, if they get some fundamentals right.

“Convenience store operators have to recognize what their strengths are. Our primary strength is time – we know the consumer out there is time-strapped and as long as we are able to get them in and out of the store quickly, offer them products they’re looking for and make sure that prices are not at a level that is insulting to them, I think we can continue to compete,” Scholten said.

He said it will take some innovation to stay ahead of the new competitors emerging in the market.

“One of things in our state of the industry report this year, we noticed that over 90 per cent of the stores that offered fresh food or food prepared on site were actually in a profitable position,” Scholten said.

One of the industry’s big concerns is high credit card fees and the industry association is looking at ways to expand debit card use in convenience stores, he said.

A loosening of provincial liquor laws might also provide a new way to attract business, he said.

“Certainly having the ability to offer a new product area, such as beer and wine outside of Quebec and Newfoundland where those are available, will offer a big advantage to our industry as well,” Scholten said.

He also points to the estimated 868 federal, provincial and municipal regulations that affect convenience store operators in Canada on everything from tobacco sales  to taxation and said the CCSA is pushing for a more streamlined regulatory regime.

“By eliminating out of date regulations, simplifying others or avoiding new, unnecessary regulation, we could achieve major improvements to the profitability of our members and to the Canadian economy in general,” he said in a press release.

“For this reason, we are calling upon governments to alleviate this burden, which we believe will trigger the creation of thousands of jobs and preserve a unique family business model that generates billions in tax revenues for the government."

Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET

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World's first Bitcoin ATM goes live in Vancouver next week October 25, 1:44 PM ET read comments Paul Reichmann, real estate magnate, dies at 83 October 25, 10:28 PM ET read comments video Loonie continues to fall on interest rate expectations October 25, 1:15 PM ET read comments Canadian beef prices could fall as Tyson stops buying October 25, 9:04 PM ET read comments video BlackBerry's 5-star BBM app reviews reportedly fake October 23, 2:53 PM ET read comments Quebec's Davie Shipyard launches new ship Cecon Pride October 25, 9:24 PM ET read comments video audio Are mom-and-pop variety stores a dying breed? October 25, 4:05 PM ET read comments video Sobeys to sell 23 stores in Safeway deal October 22, 5:49 PM ET read comments U.S. consumer confidence rattled by government shutdown October 25, 1:30 PM ET read comments Wealthiest 1% earn 10 times more than average Canadian September 11, 4:53 PM ET read comments

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Quebec's Davie Shipyard launches new ship Cecon Pride

The historic Davie Shipyard in Lévis, Que., broke out the champagne Friday for the Cecon Pride, the first ship fully built in the yard in years.

The Cecon Pride is the first in a series of three large offshore construction vessels being built for Norwegian offshore installation contractor Cecon ASA. The ship, the largest built in Canada in 20 years according to the company, floated in dry dock Oct. 19 ahead of its naming ceremony Friday. 

"This is a great day for Davie. There are only a handful of shipyards across the globe, mainly in Europe, capable of building a vessel to this specification and with this level of technology," said Davie CEO Alan Bowen.

"Our high quality vessel construction capabilities and low cost base means we are the only North American shipbuilder competing internationally, exporting vessels to European shipowners; something Davie has done for over a century."  

It was the 717th ship built at the yard. The 130-metre vessel soon will begin sea trials prior to final delivery to the client in February 2014.

"It's used for multi-purpose applications. From pipe laying to subsea construction, to deep sea well intervention, it's really about deep sea,” said Alex Vicefield, chairman of the shipyard.

The Davie shipyard in Levis, Que., is shown in November 2012 after being taken over by Zafiro Marine. The shipyard will launch the Cecon Pride today. (Jacques Boissinot/Canadian Press)

Since being bought by Zafiro Marine of  Britain last year, the Davie Shipyard has recalled 500 workers. The potential for offshore oil and gas development and the ships to support construction, means more opportunities.

Up until the new owners took over, Davie spent years in troubled waters. Since being sold by Canada Steamship in 1976, it has been in and out of bankruptcy.

In 2010, it was under creditor protection. Davie had ended operations, putting nearly 1,600 people out of work.

There was hope in 2011 when a consortium involving SNC-Lavalin, Upper Lakes Groups Inc. and South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering took on restructuring of the yard in order to bid on ships being built for the Canadian Coast Guard and Canadian Forces.  

In the end, the federal government did not choose Davie Shipyard to build any ships and the joint venture fell apart, leaving Upper Lakes as the sole owner.

Zafiro Marine, which manages and operates a fleet of specialized offshore vessels involved in topside and subsea construction, took over in November 2012.

While work on new Canadian warships went to the Irving Shipyards in Halifax and Seaspan in Vancouver, Davie is considering bidding on  smaller government contracts.

"It's very difficult to ignore Davie in this situation. As I said, Davie is a significantly larger shipyard with a much higher capacity than the other shipyards," Vicefield said.

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U.S. consumer confidence rattled by government shutdown

The Associated Press Posted: Oct 25, 2013 1:30 PM ET Last Updated: Oct 25, 2013 1:30 PM ET

U.S. consumer confidence fell in October as concern grew that the partial government shutdown and political fight over the nation's borrowing limit would slow growth.

The University of Michigan says its index of consumer sentiment fell to 73.2 from 77.5 in September. The index has fallen for three straight months after reaching a six-year high of 85.1 in July.

A measure of Americans' expectations for future growth fell to its lowest level since late 2011, pulling down the overall index.

"Consumers have increasingly moved toward the view that the government has become the primary obstacle to more robust economic growth," the survey said.

Americans made more negative references to the federal government this month than at any time in the roughly 50-year history of the survey.

Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET

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World's first Bitcoin ATM goes live in Vancouver next week October 25, 1:44 PM ET read comments Paul Reichmann, real estate magnate, dies at 83 October 25, 10:28 PM ET read comments video Loonie continues to fall on interest rate expectations October 25, 1:15 PM ET read comments Canadian beef prices could fall as Tyson stops buying October 25, 9:04 PM ET read comments video BlackBerry's 5-star BBM app reviews reportedly fake October 23, 2:53 PM ET read comments Quebec's Davie Shipyard launches new ship Cecon Pride October 25, 9:24 PM ET read comments video audio Are mom-and-pop variety stores a dying breed? October 25, 4:05 PM ET read comments video Sobeys to sell 23 stores in Safeway deal October 22, 5:49 PM ET read comments U.S. consumer confidence rattled by government shutdown October 25, 1:30 PM ET read comments Wealthiest 1% earn 10 times more than average Canadian September 11, 4:53 PM ET read comments

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More small businesses using social media, study says

More Canadian small businesses are taking to social media to interact with their consumers, according to a BMO study. (CBC)

Bank of Montreal says Canadian small business owners are increasingly savvy about using social media such as Facebook, LinkedIn and Twitter.

BMO says 57 per cent of about 300 business owners contacted for the study said they use social media.

That's up 17 points from 40 per cent in last year's study.

BMO's report is based on a Pollara telephone survey of 301 business owners, conducted between Aug. 22 and Sept. 10.

Nearly 40 per cent of the respondents said they use social media to seek ideas or suggestions

About one-third said they track what's being said about their business and one-quarter check out feedback about their competitors.

About 25 per cent said they were using social media to search for new talent, up 11 percentage points from last year.

BMO's study found Facebook was used by 43 per cent of respondents, while LinkedIn was used by 23 per cent and Twitter by 11 per cent.

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Wildly popular BBM chat service to remain free

CBC News Posted: Oct 25, 2013 9:04 AM ET Last Updated: Oct 25, 2013 4:01 PM ET

Millions of Apple and Android users who are enjoying what some have called BlackBerry's "forbidden fruit" can rest easy with the knowledge that BBM, the company's mobile instant messaging chat service, will remain free for the foreseeable future. 

"It's definitely a free service," Andrew Bocking, executive vice-president of BBM for BlackBerry told The Morning Edition host Craig Norris Friday. "We have other ideas on how to monetize that service."

Bocking said BBM will turn a profit through a combination of marketing and advertising through some yet-to-be-launched features, such as BBM Channels.

BBM Channels is a social networking feature currently in beta testing. Once up and running, it would allow users to amass followers and share content as well as allow BlackBerry to tailor and target ads towards individual users.

"We continue to plan to evolve the service and keep making it more engaging and have more reasons why people will come back to use the service," said Bocking. 

Video and voice chatting services for BBM, which are currently available to BlackBerry users only, is also coming soon to the Apple and Android platforms "within months," Bocking said. 

The launch of BBM on competing platforms has been largely seen by analysts as an attempt to secure new revenue streams for BlackBerry as it tries to regain its footing in a global smartphone market that many credit the Waterloo-based technology company for inventing.  

"This is one we're definitely investing in, this is definitely one of our key strategies, but it's one of many," he said. 

Until this week, BBM was only available to BlackBerry users and the buzz surrounding BBM's launch has been considerable, with six million users pre-registering for the app. 

On Tuesday, BlackBerry boasted that its BBM app had been downloaded 10 million times on Apple and Android devices in the first 24 hours after its launch.

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Loonie continues to fall on interest rate expectations

The Canadian dollar has fallen to a seven-week low against the U.S. dollar after the Bank of Canada indicated it will not move to hike interest rates in the next two years.

The Canadian dollar has fallen for the third straight day against the U.S. dollar, after the Bank of Canada moved Wednesday to lower expectations of an interest rate hike.

The loonie fell one-quarter of a cent to 95.70 cents US in early afternoon trading, a seven-week low, and is down a cent and a half so far this week.

On Wednesday, Bank of Canada governor Stephen Poloz indicated the bank is not expecting to raise rates any time soon, and that a cut to interest rates may be just as likely if economic conditions do not improve.

The bank also lowered its outlook for Canadian growth for the next three years, as Canadian exports have yet to pick up.

Andrew Pyle, senior wealth adviser and portfolio manager at Scotia McLeod, said he believes the loonie could hit 90 cents US by the end of the year.

Pyle noted Poloz's background as the head of Export Development Canada as another sign the bank wants to do what it can to lower the dollar and boost exports.

"I would bet right now that the Bank of Canada would like a little bit of juice from the currency, whether it's a two- to five-cent decline back towards 90 cents to get the export sector going and to get the economy going," Pyle said in an interview on CBC's Lang & O'Leary Exchange.

Other economists also see the dollar falling, but not as quickly. In a note, Capital Economics says it sees the Canadian dollar falling to 92 cents by the end of June next year.

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Justin Trudeau shares 'steadfast' Keystone XL support in D.C.

By Meagan Fitzpatrick, CBC News Posted: Oct 25, 2013 2:39 PM ET Last Updated: Oct 25, 2013 3:44 PM ET

Liberal Leader Justin Trudeau concluded his first visit to the U.S. capital on Friday after a series of meetings with White House officials and others and following a panel discussion a day earlier where he touted the benefits of building the proposed Keystone XL pipeline.

Trudeau appeared Thursday on a panel with Madeleine Albright, former U.S. secretary of state, and Julia Gillard, Australia’s former prime minister, at a conference hosted by the Centre for American Progress.

The Montreal MP said during the talk that he supports TransCanada’s proposed pipeline that would carry crude oil from Alberta to refineries on the Gulf Coast because it would be good for Canada and the U.S.

He acknowledged that his position may have surprised some in an audience that would have included strong critics of the project.

“There were some people who raised an eyebrow, absolutely,” Trudeau told reporters on Friday. “I'm seen as a strong, young progressive with an environmental background. The fact that I'd be talking positively about the project I think got people thinking about the fact that perhaps it's not as bad as it's been caricatured.”

Trudeau added that the pipeline is “an important energy infrastructure” for both countries, will be good for the Canadian economy and that it must be done in a sustainable and properly regulated way.

A decision on whether the controversial Keystone XL pipeline can go ahead is currently in the hands of U.S. President Barack Obama and it’s not clear when he will make it. Ministers in Harper’s cabinet have made multiple trips to Washington in recent years to lobby for its approval.  Alberta Premier Alison Redford is also a frequent visitor.

Now Trudeau has added his voice to the Canadian contingent of Keystone backers who push for its approval while in Washington. “My support for Keystone is steadfast,” he said while talking on a street near the Canadian Embassy.

Not far away there is a bus shelter with an anti-Keystone poster designed by Canadian Franke James in it. James was recently in the city along with Canadian environmentalist David Suzuki for a panel discussion sponsored by the Natural Resources Defence Council. They urged the Obama administration to reject Keystone.

Many environmentalists are opposed to the pipeline and some Americans are against it because they say it won’t create all the jobs its proponents say it will and is more in Canada’s interest than in America’s. Trudeau, however, said the U.S. will benefit from the pipeline.

Liberal Leader Justin Trudeau arrives to speak to reporters during his first official visit to Washington on Friday. (Susan Walsh/Associated Press)

“There are lots of American jobs involved and there's lots of opportunities for the United States as well,” he said. “There are many Americans who support Keystone as well, so I'm not particularly worried about it being an unbalanced deal. It's just part of a longstanding working friendship between our two countries.”

While Trudeau is in favour of the Keystone pipeline, he’s not supportive of the proposed Northern Gateway project that would transport oil from Alberta to British Columbia’s coast. “They are very, very different proposals,” the Liberal leader said. Keystone, for example, has been signed off on by Canada’s energy board while the Northern Gateway line would mean bigger risks to more ecologically sensitive areas and to people in B.C. who rely on the water for their livelihoods, he said.

"It's important that we get our resources to market, but it's also important that we understand that it's not just up to governments to grant permits anymore. We have to get communities to grant permission and that's something that we need to spend more time focusing on," Trudeau said.

He was also asked about the Senate scandal dominating politics back home and said he is “very proud” of the motion put forward by his party’s leader in the upper chamber, James Cowan. He said it would encourage an open hearing.

“I’m not being overly controversial when I say I believe in the rule of law and due process and I think that's important that we continue to fight for," said Trudeau.

But when asked about the government’s budget bill that could curtail some federal workers’ right to strike, Trudeau wouldn’t bite. He would only say that he supports collective bargaining and unions generally and that he didn’t want to criticize Harper while abroad. There is a traditional protocol in politics, that when followed, involves politicians not criticizing their country's government while outside their borders.

“I feel that when I'm on a foreign trip, on foreign soil, my primary role is as a representative of Canada and a representative of the Canadian people and I try not to be too critical,” Trudeau said.

Trudeau has travelled to more than 80 countries but had never been to Washington. He met with White House officials including Gene Sperling, director of the National Economic Council, and Jason Furman, who chairs the President’s Council of Economic Advisers, during his visit.

One of his goals on the trip was to build relationships that will be important in the years to come, Trudeau said, as he works toward a bigger goal – becoming prime minister.

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Canadian beef prices could fall as Tyson stops buying

One of the world's largest producers of meat says it will stop buying Canadian cattle because of the high cost of having to follow U.S. meat labelling rules.

The decision from Tyson Foods Inc. is expected to lead to a drop in prices for Canadian producers.

Martin Unrau, president of the Canadian Cattlemen's Association, says the decision is a huge blow to the industry.       

“The cattle we raise here are the exact same type of cattle that they raise in the U.S. under the same conditions. We are using the same products. So absolutely it's a trade barrier,” Unrau told CBC News.

Tyson is the third-biggest buyer of Canadian cattle and bought about 150,000 head last year.

"Other American buyers certainly could follow suit, and that's a real concern for us," said Agriculture Minister Gerry Ritz, adding that the Tyson decision shows Canada has to diversify and find new markets.

"We have a 70 per cent reliance on the Americans for processing and for purchasing livestock. We need to move away from that, and, of course, by moving product now into the European theatre, just as soon as we get [the Canada-European Union free trade deal] ratified, certainly is the right way to go."

Canada is challenging the U.S. country-of-origin meat labelling policy with the World Trade Organization and in the U.S. courts.

The regulations track beef and pork through the meat processing and distribution systems and require labels that state where animals are born, where they are slaughtered and where they are packed.

Labels would include such information as "born, raised and slaughtered in the United States" for American meat. Cuts of meat from other countries could carry labels such as "born in Canada, raised and slaughtered in the United States."

Tyson said  it is disappointed with the U.S. rules that require labels on meat products to contain detailed information about where the products come from. It also means that meat coming from different countries has to be segregated in a warehouse and labelled differently, increasing costs for the meat packers.

"Unfortunately, we don't have enough warehousing capacity to accommodate the proliferation of products requiring different types of labels due to this regulation," Tyson spokesman Worth Sparkman wrote in an email.

"As a result, we have discontinued buying cattle shipped to our U.S. beef plants directly from Canada effective mid-October."

Sparkman said Tyson would continue buying Canadian calves for U.S. feedlots.

Cattle shipments to the U.S. were cut in half in the first year after the U.S. proposed country-of-origin labelling in 2008. There was a 58 per cent drop in slaughter hog exports.

In November, the rules become even more stringent. The Tyson decision worries Canadian feedlot operators.

“I wouldn't' say it's a death knell but it's a further strain on our industry at a time when we were looking for some relief,” said Ben Thorlakson, who owns a feed yard near Airdrie, Alta.

“We have one fewer buyer and we only had five to start with … so it's just reduced the overall demand for our cattle … and therefore the prices are lower, but that's an overall effect of this country-of-origin labelling initiative.”

The Canadian Cattlemen's Association is part of a coalition that is in the process of appealing a U.S. court ruling last month. That ruling rejected a request for an injunction against the latest version of the U.S. label policy, which is to go into effect in November.

The coalition argues the policy would be costly and offer no food safety or public health benefit.

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Paul Reichmann, real estate magnate, dies at 83

Once the head of the largest real estate development company in the world, which went bankrupt in 1992, Paul Reichmann died Friday in Toronto. He was 83.

The reclusive Reichmann brothers built Olympia & York into a major international development firm after starting out as a small company marketing flooring and tile in Toronto.

The five Reichmann brothers were the sons of Orthodox Hungarian Jews who fled central Europe during the Second World War.

Older brother Edward started Olympia Flooring and Tile in Montreal and was joined in Canada by Paul, Albert, Louis and Ralph. After the brothers began a small company in Toronto, Paul Reichmann was the force who parlayed it into a global real estate empire.  

Their developments included First Canadian Place in Toronto, the World Financial Center (right next to the World Trade Center in New York), and Canary Wharf in London.

Paul Reichmann was born in Vienna in 1930, where his father, Samuel, had his business at the time. His mother's name was Renée.

Paul Reichmann is shown in London in 1989. He was the driving force behind the huge Canary Wharf development in the British capital. (Canadian Press)

By sheer luck, in 1938, the family was visiting Paul's grandfather in Hungary when the Nazis occupied Austria and annexed it with Germany.

They settled in Paris for a time, but by 1940, the Nazis were there too. Late in life, Reichmann could still remember the Nazi bombing of refugees south of Paris.

The family moved to Tangier in Morocco, where they prospered, as his father became a successful currency trader.

When the war ended, Paul studied religion in Britain and Israel, and became a rabbi. In 1953, he went back to Morocco and became a shirt retailer. That same year he married Lea Feldman.

In 1956, Paul joined his brother Edward in Montreal. Then, joined by brothers Albert and Ralph, they started a development business in Toronto.

Initially, they built warehouses and commercial buildings. Their first major project was the development of Flemingdon Park in Toronto's Don Mills neighbourhood.

In 1971, they advanced right into the heart of Toronto's financial district and won the contract to build what was then Canada's tallest building, First Canadian Place, at King and Bay streets.

By the 1980s, Olympia & York was the largest property development firm in the world, having bought a portfolio of skyscrapers in New York.

"He seemed to have this extraordinary knack of being able to see value where other people couldn't see it, and also extracting value from the buildings he built by financing them in creative ways and raising money to go on to bigger and better things," said Peter Foster, the author of the 1993 book, Towers of Debt: The Rise and Fall of the Reichmanns.

In 1980, they got 50-per-cent control of Brinco Ltd., a natural resources development company in Newfoundland and Labrador. The next year they bought an 82-per-cent controlling interest in Abitibi-Price Inc., and they held a significant share of Royal Trust Company. In 1985, they bought Gulf Canada Resources Ltd.

Along the way, they had acquired English Property Corp., one of the largest developers in Britain. That was the company that enabled them to build Canary Wharf in east London, at once their greatest achievement and their greatest failure.

The largest real estate development in the world at the time, it boasted Britain's tallest building, One Canada Square.

It was Reichmann's vision (only now coming to fruition) that it would be a kind of Wall Street of London and successfully compete with the city's historic financial district known as the City.

But by the time it was finished in 1992, the London commercial property market had collapsed, bringing down Olympia & York.  In March of that year, Reichmann was forced to resign as president.

When it filed for bankruptcy in May 1992, Olympia & York owed more than $20 billion US to various banks and investors. It was closed down in 1993, and the Reichmanns were left with a small firm, Olympia & York Properties Corp.

There are several theories about what went wrong with Paul Reichmann's judgment when he embarked on the Canary Wharf enterprise.

His reliance on his own business instincts may have led him astray, claims Foster.

According to the president of Canary Wharf, George Iacobescu, the Iron Lady herself, Margaret Thatcher, had personally called to ask Olympia & York to take on the development, and she promised that the Jubilee Line of the London Underground would be extended to speed up the trip to Canary Wharf from central London.

That promise was key to the development's success. But the line was not extended in her time. It opened only in 2000, long after the demise of Olympia & York.

Paul Reichmann was famous for sealing deals with a handshake and not bothering with corporate lawyers, and he always kept his word. He may have thought Thatcher would do the same thing.

The Olympia & York bankruptcy did not leave Reichmann poor by any means. In 2011 he was still listed among the richest Canadians. At number 30 on the list, his net worth was given as $1.83 billion, and that was up slightly from the year before.

In his usual secretive manner, Paul had continued with canny investments. For instance, he owned 70 per cent of Central Park Lodges, which in 1999 operated 74 retirement homes, 63 in Canada, the rest in the U.S., according to the National Post.

He was also involved in a $107-million project in Israel, according to the Jerusalem Post newspaper.

His company, IPC Jerusalem Ltd., built a five-star hotel and luxury condominium, called The Palace Jerusalem — The Waldorf Astoria Collection.

In 2004, he again bought a controlling stake in Canary Wharf, a development that by then was considered essential to the fabric of London. He gave it up in 2009.

Reichmann always lived humbly and austerely, in keeping with his ultra-Orthodox Jewish beliefs, even to the point of closing down his many development projects, and allowing no work there on the Sabbath.

"His accomplishments were titanic, just look at the Bank of Montreal building for example," said Tom Caldwell of Caldwell Securities. "Yes, he got bushwacked in Canary Wharf in England, but he came from a small business to play in the big leagues and he played it well. And he played it with dignity."

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Mackenzie Valley pipeline facing possible revival

There are growing signs that the stalled Mackenzie Valley pipeline project could get a new lease on life.

The federal government has quietly dusted off a $500-million socio-economic fund that would kick in if the project goes ahead. The Mackenzie Gas Projects Impact Fund was set up in 2006 but has remained dormant. It was included and updated in this week's budget implementation act.

The fund is not operational yet, but the timing means it's ready to go if construction starts on the pipeline.

Development of northern resources has been priority for Prime Minister Stephen Harper since he was elected in 2006. His government in 2009 set up the Canadian Northern Economic Development Agency (CanNor), for which Environment Minister Leona Aglukkaq is responsible.

The government "is committed to fostering a strong, prosperous and dynamic northern economy," Aglukkaq's office said in a written response to questions from CBC News.

"Should the CanNor minister be named responsible at some point for the fund, as the regional economic development agency for the North, the agency is well-positioned to deliver this fund on behalf of northern communities."

At the same time, there are signs the project may be commercially viable.

Imperial Oil and its partners are looking at options to turn the 1,200-kilometre northern gas pipeline into an liquefied natural gas project. LNG, as it is often called, is natural gas that's cooled to -162 C. This shrinks the volume of the gas by 600 times, making it easier to store and ship.

"As we look at strategic options for the Mackenzie resource one of the things we are looking at is … could gas from the Mackenzie potentially play a role in an LNG development scenario?" said Imperial spokesman Pius Rolheiser.

Imperial and its partners, Royal Dutch Shell, ConocoPhillips, Exxon Mobil and the Aboriginal Pipeline Group, received final approval from the National Energy Board in 2011 for the $16.2 billion project after more than six years of regulatory review. The pipeline was originally designed to carry natural gas down the Mackenzie Valley to Alberta and the U.S.

A glut in natural gas and slumping prices put the project on hold.

But earlier this year, Imperial and its majority partner Exxon Mobil Corp. applied for an LNG export permit from a future terminal in either Kitimat or Prince Rupert, B.C. The companies would draw from the gas fields they own in Canada, like those in the Mackenzie Delta.

"So in our assessment of a potential LNG project, one of the things we are looking at is, could gas from the Mackenzie Delta play a role in an LNG scenario?" said Rolheiser in an interview from Calgary. "But at this point we are in the early stages and we have not made any decisions on that."

(CBC)

The main forces behind this burst of activity are price and timing. Imperial has to report to the NEB on its decision to construct the pipeline by the end of this year and must provide an updated cost estimate. It has to start construction by the end of 2015.

And there is a growing market in Asia for liquid natural gas. While Rolheiser emphasizes that a decision has not been made, a source close to the project says the LNG option is very much in play.

"We are looking at all options here and there is more than one option for this pipeline," said the source.

Natural Resources Minister Joe Oliver just got back from a trip to China and South Korea, where he spent a lot of time talking about LNG. He says Canada's natural gas resources are an "immense economy opportunity that can benefit all Canadians."

And the pipeline would help tap that potential.

"That is why we are supportive of this important resource development opportunity, with a focus on supporting jobs, economic growth, environmental protection and constructive relationships with First Nations communities," Oliver wrote in an email to CBC News Thursday.

All this is very good news for the Northwest Territories that has been holding out hope for the on-again, off-again pipeline since the 1970s.

"We are hearing that the proponents are interested in seeing the Mackenzie gas get to market, which is a very positive sign for us, with a resource that has been stranded in the Mackenzie delta for forty years," said N.W.T. Industry Minister David Ramsay.

Ramsay said he has not officially heard that the project is definitely going ahead, but he's optimistic.

"Any talk of us getting a resource like to that to market is something we are encouraged to hear," he said in an interview from Yellowknife.

Ramsay said he hopes to get more details in early November.

The majority of people in the territory support the project because of the economic development it would bring. Aboriginal groups own one-third of it as part of the Aboriginal Pipeline Group.

While Imperial won't speculate on chances of the pipeline carrying LNG, Rolheiser notes the company has spent considerable time and money on this project and doesn't want to squander it.

"We made a significant investment in terms of our relationship with the people of the North as represented by the Aboriginal pipeline group and that is a terribly important asset to us," he said. 

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Harper to reveal Canada-EU trade deal details Tuesday

Prime Minister Stephen Harper will table the tentative free trade agreement with the European Union in the House of Commons on Tuesday — the same day his government hopes to cut off debate in the Senate on the motion to suspend Senators Mike Duffy, Pamela Wallin and Patrick Brazeau without pay.

Harper’s office is sending out invitations to industry groups and business executives to witness the tabling of the agreement on principle on the Comprehensive Economic and Trade Agreement.

A reception with Trade Minister Ed Fast will follow question period.

The timing is no coincidence. It dovetails with a vote on the procedural move to cut off the debate over suspending the three former Conservative senators embroiled in the scandal over living and travel expenses.

That debate continues to drag on in the Senate, and cracks are beginning to appear in the Conservative caucus over the fairness of depriving the three of their livelihood before they have had a public hearing, or criminal charges have been laid.

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Lower spending keeps Ottawa on track to hit deficit target

Ottawa says it remains on track to reduce the deficit as program spending falls in August.

The federal government says it recorded a $2.3 billion deficit in August, an improvement from the $3 billion shortfall it posted during the same month last year.

It says the key reason to the better monthly number was a $759-million decrease in program spending.

The Finance Department says the deficit for the first five months of the 2013-14 financial year as a whole now stands at $6.8 billion, slightly lower than the $7.2 billion posted for the same period last year.

The government revealed earlier this week that its deficit for the 2012-13 fiscal year had finalized at $18.9 billion, about $7 billion less than was predicted in the March budget.

Given the trend so far, Ottawa also appears in position to better its $18.7 billion deficit target for this fiscal year as well.

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World's first Bitcoin ATM goes live in Vancouver next week

CBC News Posted: Oct 25, 2013 1:44 PM ET Last Updated: Oct 25, 2013 1:44 PM ET

The world's first Bitcoin kiosk, made by Robocoin, begins operation in Vancouver next week. (Robocoin/Canadian Press)

What's believed to be the first Bitcoin ATM in the world will go live next week in Vancouver, operated by Nevada-based Robocoin and Vancouver's Bitcoiniacs.

Mitchell Demeter, co-founder of Vancouver bitcoin trading company Bitcoiniacs and part-owner of Robocoin, has invested in five such machines to be placed across Canada.

Bitcoins are an emerging digital currency that isn't controlled by any authority such as a central bank. It’s an idea that is moving into the mainstream, despite the scandal surrounding Silk Road, an anonymous online marketplace for illegal drugs and other illicit goods that used Bitcoins.

Silk Road was shut down and its owner arrested on narcotics charges earlier this month.

The new ATM, to operate near downtown Vancouver coffee house Waves, will trade Canadian dollars for online Bitcoins. Users are required to do a palm scan and are permitted to exchange up to $3,000 per a day.

Canadian cash is exchanged  on Canada’s VirtEx exchange for Bitcoins, which are then entered in your online bitcoin wallet. Transactions will be anonymous.

The palm scan is to limit people to less than $3,000 worth of transactions, and avoid tangling with Canada’s anti-money-laundering laws, says Demeter, who adds that he believes he is complying with all Canadian laws

Bitcoins currently trade for close to $200, but have swung widely in value from $13 to $250 in the past year. Until now, most have been traded person-to-person in individual transactions or through various unregulated exchanges that exist mostly online.

Last year, a bitcoin exchange in Europe, Bitcoin-Central, was authorized to operate as a bank.  Robocoin, which showed the ATMs at a California conference earlier this year, says the Vancouver ATM is the first to begin operation.

Bitcoiniacs says it's eyeing major Canadian cities such as Toronto, Montreal, Calgary and Ottawa for the other four machines, to come in December.

"Basically, it just make it easier for people to buy and sell Bitcoins and hopefully will drive the adoption of Bitcoin, and make it more accessible for people," Demeter told CBC News.

Bitcoins are mathematically generated through a series of commands executed by computers in a peer-to-peer network. The process is called Bitcoin "mining" and is set up so that the total number of Bitcoins that can ever be generated is limited to about 21 million.

While some have doubted Bitcoin's validity and others have raised concerns that the unregulated currency is being used for nefarious means, a U.S. judge ruled last month that Bitcoin, which has been around since 2009, is a real currency.

Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET

The data on this site is informational only and may be delayed; it is not intended as trading or investment advice and you should not rely on it as such.

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Samsung files patent for Google Glass-like specs

The Associated Press Posted: Oct 25, 2013 10:01 AM ET Last Updated: Oct 25, 2013 10:01 AM ET

Samsung's sketch shows a thumbnail-sized display over the left eyeglass. Google's eyewear, shown above, has a tiny display over the right eyeglass that shows information and websites. (Reuters)

A patent filing shows Samsung Electronics Co. is working on a device it calls sports glasses in a possible response to Google's internet-connected eyewear.

A design patent filing at the Korean Intellectual Property Office shows a Samsung design for smartphone-connected glasses that can display information from the handset.

It said the glasses can play music and receive phone calls through earphones built into the eyewear's frame. It also gives hands-free control over the smartphone.

Reminiscent of the Google Glass design, Samsung's sketch shows a thumbnail-sized display over the left eyeglass. Google's eyewear has a tiny display over the right eyeglass that shows information and websites.

It was not clear from Samsung's sketch and description whether its eyewear would be equipped with a touch control and a camera like Google Glass nor whether it would connect directly to the mobile internet or be a slave to a smartphone.

Samsung's glasses are designed to connect to a smartphone, but it wasn't clear whether the device would be able to connect directly to the internet as well.

The name and the description specify the Samsung product is designed for outdoors activities or sports.

Samsung did not respond to an email and a call seeking comment.

Google Inc. is testing an early version of Google Glass with 10,000 people in the U.S. after giving the public a first look at its internet-connected eyewear in June last year. The early version can take pictures, record videos, navigate maps and works without a smartphone.

Other tech companies are also exploring ways to bring mobile computing to everyday objects such as watches and glasses.

Samsung introduced a smartphone-connected watch called the Galaxy Gear last month. Sony also announced a smart watch.

Samsung filed the application for the eyewear design patent on March 8.

October 26: There's Gold in Them Thar Trees Oct. 25, 2013 5:02 PM They say that money doesn't grow on trees. But it appears that gold does. Scientists in Australia have discovered gold particles in the leaves of eucalyptus trees that grow above gold deposits. And they might provide a natural detection system for mining companies.

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New Zealand Energy Announces Second Quarter Results and Operational Update

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 29, 2013) - New Zealand Energy Corp. ("NZEC" or the "Company") (TSX VENTURE:NZ)(OTCQX:NZERF) has released the results of its second quarter ended June 30, 2013. Details of the Company's financial results are described in the Unaudited Consolidated Financial Statements and Management's Discussion and Analysis which, together with further details on each of the Company's projects, will be available on the Company's website at www.newzealandenergy.com and on SEDAR at www.sedar.com. All amounts are in Canadian dollars unless otherwise stated.

HIGHLIGHTS

Production and Development

Announced development plans for the Taranaki Basin until the end of 2014, forecasting exit production rates of 2,300 BOE/day (applying mid-case assumptions)1 48,752 barrels of oil ("bbl") produced and 49,204 bbl sold during six-month period, generating pre-tax oil sales of $5.3 million Positive net cash flow from petroleum operations during six-month period of approximately $1.7 million Average field netback during six-month period of $35.10/bbl Substantial reduction to direct production costs at Copper Moki site during June 2013 as a result of the installation of permanent production facilities 56,717 bbl produced and 59,623 bbl sold year to date (August 26, 2013), generating pre-tax oil sales of approximately $6.4 million Cumulative production of 264,938 bbl since commencement of production, generating pre-tax oil sales (including sales from pre-production testing) of approximately $28.5 million Initiated installation of artificial lift at Waitapu-2 well Received results of RPS reservoir study, providing the Company with a better understanding of Mt. Messenger reservoir characteristics and declines Lodged an application for a petroleum mining permit that will encompass the Company's Copper Moki, Waitapu, Arakamu and Wairere sites in the Eltham Permit (18.73 km2)

Acquisition of TWN Licences and TWN Assets from Origin Energy

Amended deal terms related to the acquisition, resulting in a simplified sale and reduced purchase price Entered into a binding letter agreement with L&M Energy ("L&M") to explore and operate the TWN Licences and TWN Assets, securing $18.25 million from L&M to purchase a 50% interest in the assets Obtained an extension to secure remaining required funds ($9.25 million) until September 30, 2013 Settled the HSBC operating line of credit Announced 2P reserves of 1.07 million BOE attributed to the TWN Licences (NZEC's interest)2 1 Barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. The boe conversion ratio of 6 Mcf : 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. See Forward-looking Information for assumptions associated with production forecast.2 Reserves associated with the TWN Licences, as previously announced in an NZEC press release on June 17, 2013, will not be attributable to NZEC until the Company has completed the acquisition of assets from Origin and filed an updated Reserve report under NI 51-101. NZEC's shares of the TWN Reserves is 50%, as per the terms of the TWN Arrangement with L&M.

FINANCIAL SNAPSHOT

Six months
ended
June 30, 2013Three months
ended
June 30, 2013Six months
ended
June 30, 2012Three months
ended
June 30, 2012Total comprehensive income (loss)(Loss) earnings per share - basic and diluted

Note: The abbreviation bbl means barrel or barrels of oil.

Six-month Operating Results

During the six-month period ended June 30, 2013, the Company produced 48,752 barrels of oil and sold 49,204 barrels for total oil sales of $5,277,878, with an average oil sale price of $107.27 per barrel. Total recorded production revenue, net of a 5% royalty payable to the New Zealand Government (an average of $4.94 per barrel), was $5,034,958. Production costs during the six-month period ended June 30, 2013 totalled $3,307,876, or an average of $67.23 per barrel, generating an average field netback of $35.10 per barrel during the period. NZEC calculates the netback as the oil sale price less fixed and variable production costs and a 5% royalty. The notable reduction in netback during the six-month period ended June 30, 2013, is predominantly the result of decreased oil production. As previously announced, the Company had shut in the Waitapu-2 well during May 2013 in order to gather critical data for the Mt. Messenger reservoir study (see Reservoir Study) and to evaluate and install artificial lift.

The Company undertook a number of reservoir and production tests with the objective of optimizing oil production, and these tests have added to production costs. During the six-month period ended June 30, 2013, fixed production costs represented approximately 84% of total production costs. Installation of the Copper Moki surface facilities was completed in May and, as expected, this resulted in a reduction in production costs for the Copper Moki site during the month of June 2013, as discussed under June Operating Results - Copper Moki Site Only. Although shutting in the Waitapu-2 well in May 2013 reduced some of the fixed operating costs, the Company continues to incur costs on that site.

Three-month Operating Results

During the three-month period ended June 30, 2013, the Company produced 18,573 barrels of oil and sold 21,958 barrels for total oil sales of $2,216,815, with an average oil sale price of $100.96 per barrel. Total recorded production revenue, net of a 5% royalty payable to the New Zealand Government (an average of $4.88 per barrel), was $2,109,700. Production costs during the three-month period ended June 30, 2013 totalled $1,616,471, or an average of $73.62 per barrel, generating an average field netback of $22.46 per barrel during the period.

As demonstrated in Six-month Operating Results, reduced production following the shut-in of Waitapu-2 greatly impacted the three-month netback results, although this was partially offset by reduced production costs related to the Copper Moki site following the commissioning of surface facilities (see June Operating Results - Copper Moki Site Only).

June Operating Results - Copper Moki Site Only

The Company is starting to see the positive effect on production costs of installation of surface facilities as reflected in reduced production costs related to the Copper Moki site during June 2013. Following the commissioning of surface facilities on the Copper Moki site in May 2013, the Company incurred direct production costs of approximately $165,000 to produce 4,740 barrels of oil, which amounted to $34.81 per barrel during the month of June 2013, a significantly lower production cost per barrel than the quarterly average of $73.62 per barrel. This is also comparable to management's estimate of well-site production costs of NZ$40 per barrel as assumed in management's forecast of cash flows from operations referenced in the Company's August 6, 2013 press release.

Considering the proportion of fixed production costs reported for the quarter ended June 30, 2013, as well as netbacks reported in prior periods, the direct production costs per barrel is reflective of the economies of scale. Thus, further savings should arise from higher production levels from future developments.

At August 26, 2013, the Company had an estimated $4.6 million in net working capital.

ACQUISITION OF INTEREST IN UPSTREAM AND MIDSTREAM ASSETS

As previously announced, the Company has entered into an agreement with Origin Energy Resources NZ (TAWN) Limited ("Origin") to acquire three (net) petroleum mining licences in the Taranaki Basin totalling 23,049 acres (93.3 km2) - the Tariki, Waihapa and Ngaere Licences (the "TWN Licences") - as well as the Waihapa Production Station and associated gathering and sales infrastructure (the "TWN Assets"). On August 12, the Company announced that Origin had agreed to extend the deadline for satisfying the financing condition precedent for the acquisition from August 14, 2013 to September 30, 2013, and to extend the deadline for obtaining the required government approvals from September 13, 2013 to October 14, 2013. In exchange, the Company agreed to increase its acquisition deposit to $6 million.

L&M Letter Agreement to Form Joint Arrangement

On July 30, 2013, the Company announced that it had entered into a binding agreement (the "L&M Letter Agreement") with L&M Energy ("L&M") to form a 50/50 joint arrangement to explore, develop and operate the TWN Licences and the TWN Assets. Once the joint arrangement is completed, the Company and L&M will each own 50% of the TWN Licences and will also hold a 50% interest in the TWN Assets (the "TWN Joint Arrangement"). The reserves and resources estimated for the TWN Licences, as announced on June 17, 2013, will be attributable to NZEC on a 50% basis upon closing of the acquisition and the TWN Joint Arrangement, and filing of an updated reserve report.

Under the terms of the L&M Letter Agreement, L&M will contribute $18.25 million towards the approximately $33.5 million purchase consideration agreed to under the Origin Sale and Purchase Agreement, in order to obtain a 50% interest in the TWN Joint Arrangement. L&M will also contribute 50% of all future development and operating expenditures.

The Company will become the operator of the TWN Joint Arrangement, and decisions regarding exploration, development and operations of the TWN Joint Arrangement will be made by management committees with equal representation from both the Company and L&M.

The Company will be responsible for funding the $15.25 million balance of the $33.5 million purchase consideration agreed to under the Origin Sale and Purchase Agreement. The Company has paid a $6 million acquisition deposit to Origin, leaving $9.25 million to be funded to complete the acquisition.

The concurrent completion of the acquisition and the L&M Letter Agreement is subject to the Company placing the remainder of the purchase price into an escrow account by September 30, 2013, Origin and Contact consenting to L&M becoming a party to the definitive agreements, as well as receiving the relevant government approvals.

PROPERTY REVIEW

Taranaki Basin

The Taranaki Basin is situated on the west coast of the North Island and is currently New Zealand's only oil and gas producing basin, with total production of approximately 130,000 barrels of oil equivalent per day ("boe/d") from 18 fields. Within the Taranaki Basin, NZEC holds a 100% interest in the Eltham Permit, a 65% interest in the Alton Permit in joint arrangement with L&M, and a 60% interest in the Manaia Permit in joint arrangement with New Zealand Oil & Gas ("NZOG"). The Eltham Permit covers approximately 93,166 acres (377 km2) of which approximately 31,877 acres (129 km2) are offshore in shallow water. The Alton Permit covers approximately 119,204 onshore acres (482 km2). The Manaia Permit covers approximately 27,426 onshore acres (111 km2) and was granted to NZEC and NZOG in December 2012 as part of the annual New Zealand block offer for exploration permits.

NZEC also expects to acquire 50% of the three TWN Licences and to hold a 50% interest in the TWN Assets upon completion of the acquisition of assets from Origin, as outlined in Acquisition of Interest in Upstream and Midstream Assets.

Production

At the date of this MD&A, three of the Company's four commercially producing wells are in active production. The Waitapu-2 well is currently shut in and installation of artificial lift and surface facilities is underway. During the quarter, the Company also temporarily shut-in its Copper Moki-3 well to replace the down-hole pump, which seized as a result of fines settling in the pump during commissioning of the Copper Moki surface facilities. The wells are producing light oil that is trucked to the Shell-operated Omata Tank Farm and sold at Brent pricing. Cumulatively, as of the date of this report, the Company has produced approximately 264,938 barrels of oil, with cumulative pre-tax oil sales of approximately $28.5 million, including sales from oil produced during testing (net results of operations are discussed under Results of Operations). The wells have consistently produced between 123 bbl/d and 162 bbl/d since July 1, 2013, with an average production rate of 144 bbl/d, indicating that oil production from the Copper Moki wells appears to have stabilized. Over 26 production days in August 2013, the wells have collectively produced oil at an average rate of 139 bbl/d and extracted gas at an average rate of 490 mcf/d. The Company is not yet generating cash flows from extracted gas.

Copper Moki-1 has been producing since December 10, 2011, Copper Moki-2 since April 1, 2012 and Copper Moki-3 since July 2, 2012. All three wells produce ~41° API oil from the Mt. Messenger formation and flowed from natural reservoir pressure until October 2012, when NZEC installed artificial lift (pump jacks) to stabilize production rates.

Waitapu-2 commenced production on December 20, 2012 and was shut-in in May 2013 as described above. The well produces ~40° API oil from the Mt. Messenger formation and flowed from natural reservoir pressure until shut-in. Installation of artificial lift is currently underway. In addition to installation of artificial lift, during the period the Company ran down-hole gauges into Waitapu-2 that measures the bottom hole temperature and pressure of the reservoir. These data were critical to the recently completed Mt. Messenger reservoir study (see below).

Reservoir Study

Production declines from the Copper Moki wells have been greater than expected and this prompted the Company to initiate an independent reservoir study through RPS Group PLC, a world leader in well evaluation. The study provided the Company with a better understanding of reservoir characteristics and declines, based on data from Waitapu-2, the three Copper Moki wells, and other Mt. Messenger wells in the region.

The RPS study concluded that declines are not related to wax buildup or mechanical issues. Information from the study and from a proprietary database merging five 3D seismic surveys has allowed the Company to refine its Mt. Messenger exploitation strategy, which includes:

Choosing optimally sized targets based on interpretation of the merged 3D dataset, Reducing costs by drilling multiple wells from each pad, and Prioritization of targets close to the Waihapa Production Station to expedite tie-in.

The Mt. Messenger formation remains an integral part of the Company's development plans, as described in the Outlook section. These development plans include the Horoi-1 well, which is expected to be drilled later this year on the Alton Permit.

Application for Eltham Petroleum Mining Permit

During the quarter ended June 30, 2013, the Company lodged an application for a petroleum mining permit that will have an initial duration of 15 years. This petroleum mining permit will cover 18.73 km2 within the area currently included under the Company's Eltham Permit and includes all sites on which the Company had previously drilled its ten exploration wells (i.e. the Copper Moki site, Waitapu site, Arakamu site, and the Wairere site). A successful application for the petroleum mining permit will extend the duration that the Company is able to operate within the area covered by the permit, and will also reduce the surface area within the existing Eltham Permit that will be subject to relinquishment in September 2013 when the Eltham Permit is due for extension.

East Coast Basin

The East Coast Basin of New Zealand's North Island hosts two prospective oil shale formations, the Waipawa and Whangai, which are the source of more than 300 oil and gas seeps. Within the East Coast Basin, NZEC holds a 100% interest in the Castlepoint Permit, which covers approximately 551,042 onshore acres (2,230 km2), and a 100% interest in the Ranui Permit, which covers approximately 223,087 onshore acres (903 km2) and is adjacent to the Castlepoint Permit. NZEC is considering relinquishing the Ranui Permit but has not yet made a definitive decision in this regard. On September 3, 2010, NZEC applied to the Minister of Energy to obtain a 100% interest in the East Cape Permit. The application is uncontested and the Company expects the East Cape Permit to be granted to NZEC upon completion of New Zealand Petroleum & Minerals' ("NZPAM") review of the application. The East Cape Permit covers approximately 1,067,495 onshore acres (4,320 km2) on the northeast tip of the North Island. In addition, NZEC has entered into a binding agreement with Westech to acquire 80% ownership and become operator of the Wairoa Permit, which covers approximately 267,862 onshore acres (1,084 km2) south of the East Cape Permit. Preliminary approval of transfer of ownership was obtained from NZPAM on December 20, 2012 and formation of a joint arrangement with Westech is subject to final NZPAM approval.

The Company has completed the coring of two test holes on the Castlepoint Permit. The Orui (125 metres total depth) and Te Mai (195 metres total depth) collected core data across the Waipawa and Whangai shales. NZEC also completed a test hole on the Ranui Permit. Ranui-2 was drilled to 1,440 metres, coring the Whangai shale across several intervals. In Q2-2012, NZEC completed 70 line km of 2D seismic data across the Castlepoint and Ranui permits to further its technical understanding of the area and identify targets for exploration in 2013.

The Wairoa Permit has been actively explored for many years, with extensive 2D seismic data across the permit and log data from more than 15 wells drilled on the property. Historical exploration focused on the conventional Miocene sands. NZEC's technical team has identified conventional opportunities as well as potential in the unconventional oil shales that underlie the property. NZEC's team knows the property well and provided extensive consulting services (through the consulting company Ian R Brown Associates) to previous permit holders, assisting with seismic acquisition and interpretation, well-site geology and regional prospectivity evaluation. In addition, NZEC's team assisted with permitting and land access agreements and worked extensively with local district council, local service providers, land owners and iwi groups, allowing the team to establish an excellent relationship with local communities. During Q1-2013 the Company completed a 50 km 2D seismic program on the property, the results of which are currently being processed and reviewed and will help to identify exploration targets on the permit.

OUTLOOK

On August 6, 2013, the Company announced its updated plans to develop its oil and gas assets in the Taranaki Basin, including its plans for exploration and development of the TWN Licences and integration of the TWN Assets. Completing the acquisition of the TWN Licences and TWN Assets will be transformative for NZEC, resulting in a fully integrated upstream/midstream company with the cash flow, infrastructure and inventory to support long-term growth.

Taranaki Basin

Owning 50% of the TWN Assets and TWN Licences will allow NZEC to optimize development of its existing permits. The gas supply that NZEC has identified to reactivate gas lift and production from existing Tikorangi wells on the TWN Licences will provide the blending gas required to deliver NZEC's Copper Moki gas to market, bringing additional cash flow to NZEC from the Copper Moki wells. The Company also plans to build a pipeline to connect the Waitapu-2 well to the Copper Moki site and is currently evaluating the economics of this initiative. The pipeline would effectively tie in the Waitapu gas production (and associated liquefied petroleum gas or "LPG") into the Waihapa Production Station via the Copper Moki pipeline.

As NZEC continues to explore the Eltham and Alton permits, the Company will focus on drill targets that are close to the Waihapa Production Station and associated pipelines, allowing for rapid and cost effective tie-in of both oil and gas production.

NZEC has prepared a detailed financial and production model outlining the exploration and development program for its Taranaki assets that has allowed the Company to forecast the impact of those activities on its production and cash flow. NZEC's activities planned to the end of 2014 in the Taranaki Basin are outlined in the table below:

PLANNED POST ACQUISITION WORK PROGRAMProduction Impact
(Exit 2014)Tikorangi well reactivations
-- Reactivate six existing Tikorangi wells with gas lift
-- High volume lift installation on two initial wellsIncluded in 2014
production belowMt. Messenger development
-- Waitapu artificial lift and tie-inTwo Mt. Messenger uphole completions in existing wells
-- Horoi exploration well (including surface infrastructure)Included in 2014
production belowTikorangi Well Reactivations
-- Increase water handling capacity at Waihapa Production Station
-- High volume lift installation on four remaining wellsNew Tikorangi wells
-- Drill two new Tikorangi wellsMt. Messenger development
-- Three new Mt. Messenger wells (including surface infrastructure)Kapuni development (cost to be funded by new JV partner)
-- Two new Kapuni wellsSeismic acquisition, G&G studies and OtherExit 2,300 boe/day
(including production from
existing wells)

The forecast on which the above information is based reflects management's mid-case production assumptions, while capital costs indicate management's net share of the capital cost to be incurred by the TWN Joint Arrangement.

Development and operating costs in the first 12 months following the date of this report are to be funded initially by existing working capital and cash flows from production. However, in order to carry out all of the planned development activities, the Company is considering a number of options to increase its financial capacity. These options include increasing cash flow from oil production, additional joint arrangements, commercial arrangements or other financing alternatives. For the assumptions related to the production forecast, refer to the full Management's Discussion & Analysis filed on the Company's website and on SEDAR.

East Coast Basin

NZEC has drilled two stratigraphic holes on its 100% working interest Castlepoint Permit and one stratigraphic hole on its 100% working interest Ranui Permit. These three stratigraphic test wells have advanced NZEC's understanding of the Waipawa and Whangai formations. A review of the geochemical and physical properties of the two shale packages, coupled with information from seismic data, has focused NZEC's exploration strategy for the area. The Company is actively seeking a joint venture partner for its East Coast permits. The Company is currently considering its plans for the Ranui Permit, including possible relinquishment of the permit.

NZEC has applied to NZPAM to extend the deadline for drilling the exploration well on the Castlepoint Permit to Q2-2014, while the Company continues to work towards obtaining the requisite consents and land access agreements for the Castlepoint Permit drill locations. The Company has met regularly with local communities to discuss its exploration plans.

NZEC completed a 50-km 2D seismic survey on the Wairoa Permit in Q2-2013 and is currently processing the data. The Company will finalize its exploration plans for the permit after reviewing all of the seismic and well log data.

The Company's application for the East Cape Permit is uncontested and NZEC expects the permit to be granted upon completion of NZPAM's review of the application.

SUMMARY OF QUARTERLY RESULTS

Exploration and evaluation assetsTotal comprehensive income (loss)Basic (loss) earnings per shareDiluted (loss) earnings per shareExploration and evaluation assetsTotal comprehensive income (loss)Basic (loss) earnings per shareDiluted (loss) earnings per share

On behalf of the Board of Directors

John Proust, Chief Executive Officer & Director

About New Zealand Energy Corp.

NZEC is an oil and natural gas company engaged in the production, development and exploration of petroleum and natural gas assets in New Zealand. NZEC's property portfolio collectively covers approximately 2.25 million acres (including permits and acquisitions pending) of conventional and unconventional prospects in the Taranaki Basin and East Coast Basin of New Zealand's North Island. The Company's management team has extensive experience exploring and developing oil and natural gas fields in New Zealand and Canada. NZEC plans to add shareholder value by executing a technically disciplined exploration and development program focused on the onshore and offshore oil and natural gas resources in the politically and fiscally stable country of New Zealand. NZEC is listed on the TSX Venture Exchange under the symbol "NZ" and on the OTCQX International under the symbol "NZERF". More information is available at www.newzealandenergy.com or by emailing info@newzealandenergy.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

FORWARD-LOOKING INFORMATION

This document contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively "forward-looking statements"). The use of any of the words "will", "intend", "objective", "become", "transforming", "potential", "continuing", "pursue", "subject to", "look forward", "unlocking" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such forward-looking statements should not be unduly relied upon. The Company believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct. This document contains forward-looking statements and assumptions pertaining to the following: business strategy, strength and focus; the granting of regulatory approvals; the timing for receipt of regulatory approvals; geological and engineering estimates relating to the resource potential of the properties; the estimated quantity and quality of the Company's oil and natural gas resources; supply and demand for oil and natural gas and the Company's ability to market crude oil and natural gas; expectations regarding the Company's ability to continually add to reserves and resources through acquisitions and development; the Company's ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the Company's ability to raise capital on appropriate terms, or at all; the ability of the Company to obtain the necessary approvals and secure the necessary financing to conclude the acquisition of assets from Origin on schedule, or at all; the ability of the Company to obtain the necessary approvals to conclude the TWN Joint Arrangement on schedule, or at all; the ability of the Company's subsidiaries to obtain mining permits and access rights in respect of land and resource and environmental consents; the recoverability of the Company's crude oil, natural gas reserves and resources; and future capital expenditures to be made by the Company.

Actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below and elsewhere in the document, such as the speculative nature of exploration, appraisal and development of oil and natural gas properties; uncertainties associated with estimating oil and natural gas resources; changes in the cost of operations, including costs of extracting and delivering oil and natural gas to market, that affect potential profitability of oil and natural gas exploration; operating hazards and risks inherent in oil and natural gas operations; volatility in market prices for oil and natural gas; market conditions that prevent the Company from raising the funds necessary for exploration and development on acceptable terms or at all; global financial market events that cause significant volatility in commodity prices; unexpected costs or liabilities for environmental matters; competition for, among other things, capital, acquisitions of resources, skilled personnel, and access to equipment and services required for exploration, development and production; changes in exchange rates, laws of New Zealand or laws of Canada affecting foreign trade, taxation and investment; failure to realize the anticipated benefits of acquisitions; and other factors. Readers are cautioned that the foregoing list of factors is not exhaustive. Statements relating to "reserves and resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources described can be profitably produced in the future. This document includes references to management's forecasts of future development, production and cash flows from such operations. The major assumptions applied by management are outlined in the MD&A, published on the Company's website and on SEDAR. The forward-looking statements contained in the document are expressly qualified by this cautionary statement. These statements speak only as of the date of this document and the Company does not undertake to update any forward-looking statements that are contained in this document, except in accordance with applicable securities laws.

CAUTIONARY NOTE REGARDING RESERVE ESTIMATES

The oil and gas reserves calculations and income projections were estimated in accordance with the Canadian Oil and Gas Evaluation Handbook ("COGEH") and National Instrument 51-101 ("NI 51-101"). The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six Mcf: one bbl was used by NZEC. This conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on: the analysis of drilling, geological, geophysical, and engineering data; the use of established technology; and specified economic conditions, which are generally accepted as being reasonable. Reserves are classified according to the degree of certainty associated with the estimates. Proved Reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable Reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Possible Reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves. Revenue projections presented are based in part on forecasts of market prices, current exchange rates, inflation, market demand and government policy which are subject to uncertainties and may in future differ materially from the forecasts above. Present values of future net revenues do not necessarily represent the fair market value of the reserves evaluated. The report also contains forward-looking statements including expectations of future production and capital expenditures. Information concerning reserves may also be deemed to be forward looking as estimates imply that the reserves described can be profitably produced in the future. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause the actual results to differ from those anticipated.

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Africa Oil Second Quarter of 2013 Financial and Operating Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 28, 2013) - Africa Oil Corp. (TSX VENTURE:AOI)(OMX:AOI) ("Africa Oil", "the Company" or "AOC") is pleased to announce its financial and operating results for the three and six months ended June 30, 2013.

On the back of the successful exploration activities in Kenya during 2012, the Company, together with its partners, continues to ramp up its exploration program in Kenya and Ethiopia. Entering the year, two Tullow-Africa Oil joint venture rigs were operating in Kenya and one joint venture rig was operating in Ethiopia. A fourth Tullow-Africa Oil joint venture rig has been secured and is expected to commence testing and drilling operations in Kenya on Blocks 10BB and 13T during October 2013. The Company, as operator, and its partner in Block 9 (Kenya) have secured a fifth rig, which will commence drilling operations in September 2013. In addition, the Company and its partners in Block 7/8 (Ethiopia) have secured a sixth rig, which will commence drilling operations in September 2013. For a period, the Company will have six drilling rigs operating and expects to exit the year with five rigs operating in the region. The Company plans to have drilled ten exploration wells and to have tested four wells across its exploration blocks during 2013 During the first half of the year, the Company completed a series of well tests at both Twiga South-1 and Ngamia-1 on Blocks 13T and 10BB in Kenya, respectively. These successful well tests confirmed over 5,000 barrels of oil per day ("bopd") flow potential per well and a doubling of our previous estimates of net oil pay. Ekales-1, the next exploration well in the Basin Bounding Fault Play and on trend with Ngamia-1 and Twiga South-1, commenced drilling in July. Transient Pressure Analysis has been conducted on the Twiga South-1 and Ngamia-1 well tests. No pressure depletion was recorded over the duration of the tests. Flow periods ranged from 0.5 to 2.5 days and build up periods ranged between 3 to 12 days. Upon completing testing operations at Ngamia-1 in Block 10BB, the Weatherford 804 rig mobilized to the Ekales-1 well in Block 13T. The Ekales prospect is located on the main basin bounding fault midway between the Ngamia-1 and Twiga South-1 discoveries and is targeting the same formations that were productive in these discoveries. The well spud in July and is expected to be completed around end September. In July, the Company announced a new major oil discovery at Etuko-1. Etuko-1 is located 14 kilometers east of Twiga South-1 in Block 10BB and is the first test of the Basin Flank Play in the eastern part of the Basin. The well encountered approximately 40 meters of net oil pay in the Auwerwer and Upper Lokhone targets and approximately 50 meters of additional potential net pay in the Lower Lokhone interval. The well will be tested later in the year. In July, the Company reported that the Sabisa-1 well on the South Omo Block in Ethiopia, the most northerly well drilled on the Tertiary rift trend to date, had confirmed a viable hydrocarbon system with oil and heavy gas shows. Based on the encouragement of the results, the decision was made to drill the Tultule-1 as the next well on the South Omo Block. This well is expected to spud around the end August. In the first quarter of 2013, the Company and its operating partners on Block 10A completed drilling the Paipai-1 exploration well. The Paipai-1 well tested a large four-way closed structure with Cretaceous-age sandstone targets at multiple depths. Paipai-1 spudded in September 2012 and completed drilling in the first quarter of 2013 to a total depth of 4,255 meters. Light hydrocarbons were encountered while drilling a 55 meter thick gross sandstone interval. Attempts to sample the reservoir fluid were unsuccessful and the hydrocarbons encountered while drilling were not recovered to surface. The Company and its partners were unable to test the well at the time due to the unavailability, in country, of testing equipment capable of handling the higher reservoir pressures encountered at this depth. As a result, the well has been temporarily suspended pending further data evaluation. The Company and its partner on Block 9 are currently planning to drill one exploration well in 2013. Block 9 is in the Cretaceous rift basin on trend with the South Sudan oil fields and the play concept was confirmed by the recent Paipai-1 well drilled in Block 10A. Two major prospects, Bahasi-1 and Sala-1, with large volume potential have been identified. The Company, as operator, and its partners in Block 9 have completed construction of the access road and well site for the Bahasi-1 exploration well. The Greatwall GW190 rig has commenced mobilization to site and the well is expected to spud in September. The Company and its partners continue to focus on the El Kuran oil accumulation on Block 8, discovered in the early 1970's. After completing reservoir characterization studies, the Company focused efforts on testing and completion strategies for producing commercial quantities of oil and gas. The Company and its joint operating partners on Blocks 7/8 (New Age operated) are planning to drill and test the El Kuran-3 appraisal well. The well site has been constructed, erection of the rig is ongoing at site and the well is expected to spud in September 2013. The Company continues to actively acquire, process and interpret 2D seismic over Blocks 10BA, 10BB, 12A, 13T and South Omo. In addition, the Company and its partner in Blocks 10BB and 13T will mobilize a 3D seismic crew to complete a 550 square kilometer 3D seismic survey over the Ngamia and Twiga structures later in 2013. In first quarter of 2013, the Company executed a PSC for the Rift Basin Area in Ethiopia. Located north of the South Omo Block, the Rift Basin Area covers 42,519 square kilometers. This block is on trend with highly prospective blocks in the Tertiary rift valley including the South Omo Block in Ethiopia, and Kenyan Blocks 10BA, 10BB, 13T, and 12A. The Company commenced acquiring a Full Tensor Gradiometry survey in May 2013, which is approximately 70% complete, and is conducting an exhaustive environmental and social impact assessment over the block in preparation for a seismic program in 2014. Africa Oil ended the quarter in a strong financial position with cash of $179.5 million and working capital of $141.2 million.

Keith Hill, President and CEO, commented, "Africa Oil is very encouraged with the results of our first three exploration wells in the Lokichar basin. Our fully funded 2013 work program is focused on drilling and testing multiple wells in the Lokichar sub-basin in Kenya in an effort to reach commercial thresholds and on drilling multiple potential basin-opening wells across its vast East African exploration acreage."

Second Quarter 2013 Financial and Operating HighlightsConsolidated Statement of Net Income (Loss) and Comprehensive Income (Loss)(Thousands of United States Dollars)Three months
ended
June 30,
2013Three months
ended
June 30,
2012Six months
ended
June 30,
2013Six months
ended
June 30,
2012Stock exchange and filing feesImpairment of intangible exploration assetsNet income (loss) and comprehensive income (loss)Net income (loss) and comprehensive income (loss) attributable to non-controlling interestNet loss and comprehensive loss attributable to common shareholdersNet loss attributable to common shareholders per shareWeighted average number of shares outstanding for the purpose of calculating earnings per share

Operating expenses increased $3.8 million for the three months ended June 30, 2013 compared to the prior year due mainly to an increase of $6.5 million in stock-based compensation relating to the 5,673,500 options granted in the current period. The increase was offset partially by a decrease of $3.1 million in professional fees due to finder fees paid in shares during the second quarter of 2012. The remaining $0.4 million increase can be attributed to increased salary and travel related costs associated with increased headcount and operational activity.

Operating expenses increased $1.2 million for the six months ended June 30, 2013 compared to the prior year due mainly to an increase of $6.6 million in stock-based compensation relating to the 5,673,500 options granted in the current period. The increase was offset by a decrease of $3.2 million in professional fees due to finder fees paid in shares and $3.1 million in impairment of intangible exploration assets relating to the abandonment of Blocks 7 and 11 in Mali during the prior period. The remaining $0.8 million increase can be attributed to increased salary and travel related costs associated with increased headcount and operational activity.

Financial income and expense is made up of the following items:

Three months
ended
June 30,
2013Three months
ended
June 30,
2012Six months
ended
June 30,
2013Six months
ended
June 30,
2012Fair value adjustment - warrants

The loss on revaluation of marketable securities is the result of a decrease in the value of 10 million shares held in Encanto Potash Corp which were acquired as part of the acquisition of Lion. These shares were sold during the first quarter of 2012.

At June 30, 2013, nil warrants were outstanding in AOC and 53.4 million warrants were outstanding in Horn. AOC holds 13.3 million of the warrants outstanding in Horn. The Company recorded a $0.2 million gain on the revaluation of warrants for the three months ended June 30, 2013 and a $2.9 million gain for the six months ended June 30, 2013, due to a reduction in the volatility of the shares of Horn combined with a reduction in the remaining life of the warrants. The Company will incur fair market value adjustments on the Horn warrants until they are exercised or they expire (43,868,527 expire September 20, 2013, 9,375,000 expire June 8, 2014, 156,248 expire June 11, 2014, and 15,000 expire June 18, 2014).

Interest income increased in the first six months of 2013 due to a significant increase in cash late in the fourth quarter of 2012 as a result of cash received from the non-brokered private placement in December of 2012.

The foreign exchange gains and losses are the direct result of changes in the value of the Canadian dollar in comparison to the US dollar. The Company's cash holdings are primarily in US and Canadian currency.

(Thousands United States Dollars)Accounts payable and accrued liabilitiesEquity attributable to common shareholders

The increase in total assets from December 31, 2012 to June 30, 2013 is primarily attributable to intangible asset expenditures incurred during the quarter in Kenya, Ethiopia and Puntland (Somalia).

Consolidated Statement of Cash Flows(Thousands United States Dollars)Three months
ended
June 30,
2013Three months
ended
June 30,
2012Six months
ended
June 30,
2013Six months
ended
June 30,
2012Cash flows provided by (used in):Net income (loss) and comprehensive income (loss) for the periodImpairment of intangible exploration assetsFair value adjustment - warrantsUnrealized foreign exchange lossChanges in non-cash operating working capitalProperty and equipment expendituresIntangible exploration expendituresProceeds from sale of marketable securitiesChanges in non-cash investing working capitalDeposit of cash for bank guaranteeEffect of exchange rate changes on cash and cash equivalents denominated in foreign currencyDecrease in cash and cash equivalentsCash and cash equivalents, beginning of periodCash and cash equivalents, end of period

The decrease in cash for the three and six months ended June 30, 2013 is mainly the result of intangible exploration expenditures and cash-based operating expenses.

Consolidated Statement of Equity(Thousands United States Dollars)Shares to be issued in lieu of professional feesNet loss and comprehensive loss attributable to common shareholdersTotal equity attributable to common shareholdersNon-controlling interest on issuance of Horn sharesNet income (loss) and comprehensive income (loss) attributable to non-controlling interest

The Company's consolidated financial statements, notes to the financial statements, management's discussion and analysis for the three and six months ended June 30, 2013 and the 2012 Annual Information Form have been filed on SEDAR (www.sedar.com) and are available on the Company's website (www.africaoilcorp.com).

Outlook

The Company is significantly increasing the pace of exploration. For a period during the last half of the year, the Company will have six drilling rigs operating and expects to exit the year with five rigs operating.

The Ngamia-1, Twiga South-1 and Etuko-1 light oil discoveries in the Lokichar sub-basin, combined with positive results from reservoir analysis and flow rate tests at Ngamia-1 and Twiga South-1, has led to a significant increase in the pace of exploration focused on tertiary rift basins. The Company and its joint venture partners in the tertiary rift play in east Africa plan to have four rigs operating by the end of 2013. The near term focus of these rigs is to continue drilling and testing wells in the Lokichar sub-basin in Kenya with improved efficiencies in an effort to continue building its contingent resource base, and to drill potential basin-opening wells in the Turkana, Chew Bahir, and Kerio basins in the tertiary rift play within Kenya and Ethiopia. Resources discovered to date are of a scale that the Tullow-Africa Oil joint venture partnership will initiate discussions with the Government of Kenya and other relevant stakeholders to consider development options. These discussions include consideration of a "start-up phase" oil production system with potential to deliver significant production rates with oil export via road or rail in advance of a full-scale pipeline development. The Company and its partners will continue to acquire seismic data throughout the tertiary rift in Kenya and Ethiopia in an effort to add to its existing portfolio of drill-ready prospects.

The Company and its operating partner in Block 9 in Kenya are currently mobilizing Greatwall GW190 rig to drill the Bahasi-1 exploratory well. This well which is planned to spud in September will be drilled on a large anticlinal structure targeting tertiary and cretaceous sandstones where six billion barrels of oil was discovered along trend in Sudan in a similar geologic setting. A follow-up well is also being considered in early 2014 in Block 9. The Company and its operating partners in Blocks 7/8 in Ethiopia are currently mobilizing a rig to drill a well to appraise reservoir characteristics of Jurassic carbonates on the El Kuran oil accumulation. The main focus of this well which is expected to spud in September, is to establish commercial rates with acidizing, fraccing and horizontal sidetracks being considered.

Based on the encouragement provided by the Shabeel wells, the Company and its partners entered the next exploration period in both the Dharoor Valley and Nugaal Valley PSAs which carry a commitment to drill one well in each block within an additional three year term ending October 2015. The current operational plan is to contract a seismic crew to acquire additional data in the Dharoor Valley block and to hold discussions with the Puntland Government regarding drill ready prospects in the Nugaal Valley block. The focus of the Dharoor Valley block seismic program will be to delineate new structural prospects for the upcoming drilling campaign. Horn has been in discussion with potential joint venture partners and is reviewing new venture opportunities in the region.

Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya and Ethiopia as well as Puntland (Somalia) through its 45% equity interest in Horn Petroleum Corporation. Africa Oil's East African holdings are in within a world-class exploration play fairway with a total gross land package in this prolific region in excess of 250,000 square kilometers. The East African Rift Basin system is one of the last of the great rift basins to be explored. Two new significant discoveries have been announced in the Lokichar basin in which the Company holds a 50% interest along with operator Tullow Oil plc. The Company is listed on the TSX Venture Exchange and on First North at NASDAQ OMX-Stockholm under the symbol "AOI".

FORWARD-LOOKING STATEMENTS

Certain statements made and information contained herein constitute "forward-looking information" (within the meaning of applicable Canadian securities legislation). Such statements and information (together, "forward looking statements") relate to future events or the Company's future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to, statements with respect to estimates of reserves and or resources, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities, ultimate recovery of reserves or resources and dates by which certain areas will be explored, developed or reach expected operating capacity, that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect, "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. The Company does not intend, and does not assume any obligation, to update these forward- looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in oil prices, results of exploration and development activities, uninsured risks, regulatory changes, defects in title, availability of materials and equipment, timeliness of government or other regulatory approvals, actual performance of facilities, availability of financing on reasonable terms, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual results may differ materially from those expressed or implied by such forward-looking statements.

ON BEHALF OF THE BOARD

"Keith C. Hill", President and CEO

Africa Oil's Certified Advisor on NASDAQ OMX First North is Pareto Öhman AB.

Neither the TSX Venture Exchange nor its Regulation Services Pareto Provider Öhman (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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