Africa Oil said it has been given approval by the Kenyan government for its farm in with Maersk Oil.
The company said the move means completion of the farm out of blocks 10BB, 13T and 10BA can now proceed.
Africa Oil has assets in both Kenya and Ethiopia and is listed on the Toronto Stock Exchange.
Keith Hill, Africa Oil’s chief executive, said: “We are very pleased to have received approval from the Government of Kenya.
“We feel Maersk will be an excellent partner in terms of technical and financial strength and experience critical to moving the development project forward.
“This transaction puts Africa Oil in the enviable position of not requiring any additional equity financing prior to first oil and will allow us to weather the current difficult oil price environment should it continue into 2016.”