VANCOUVER, BRITISH COLUMBIA -- Africa Oil Corp. ("Africa Oil" or "the Company") (TSX VENTURE:AOI)(OMX:AOI) is pleased to announce that it has entered into a letter of intent to acquire all of the issued and outstanding common shares of Lion Energy Corp. (TSX VENTURE:LEO) ("Lion"), a publicly traded oil and gas company listed on the TSX Venture Exchange. Under the letter of intent the parties will negotiate and enter into a definitive agreement pursuant to which Africa Oil will acquire Lion, by way of a plan of arrangement. As per the terms of the letter of intent, Africa Oil is proposing to exchange each share of Lion for 0.2 shares of Africa Oil. Lion currently has 86,118,177 common shares issued and outstanding, 2,580,000 share options with a weighted average exercise price of $0.16/share, and 11,445,000 warrants. It is proposed that each warrant will be exchanged into an equivalent number of warrants of Africa Oil, adjusted for 0.2:1 ratio noted above.

Lion is a joint venture partner of Africa Oil in Kenya and Puntland (Somalia) as follows:

In addition to the above properties, Lion has cash, cash receivables and tradable securities with an approximate aggregate value of $30,352,336.

Assuming satisfactory completion of due diligence, it is anticipated that the definitive arrangement agreement will be entered into by March 25, 2011. The definitive agreement will provide for conditions precedent that are standard for a transaction of this nature, including receipt of all regulatory, partner and third party approvals, TSX Venture Exchange approval and approval by Lion's shareholders. Lockup agreements have been signed with Lion's directors and certain of its principal shareholders who hold, in aggregate, 29.23% of the issued and outstanding Lion shares.

Keith Hill, Africa Oil's President and Chief Executive Officer, commented, "The acquisition of Lion consolidates our interest in the East African rift basins in Kenya and Puntland (Somalia). The cash portion of the