4th Nov 2009 07:00
Afren plc (AFR LN)
Proposed admission of the Company's Ordinary Shares to the Official List and Operational Update
London, Wednesday, 4 November 2009. Afren plc announces its intended Admission to the Official List and also provides an Operational Update.
Admission to the Official List
Pursuant to Rule 41 of the AIM Rules for Companies, the Company hereby gives notice of the intended cancellation of trading of its ordinary shares on the Alternative Investment Market ("AIM") of the London Stock Exchange.
It is expected that the cancellation of the trading in its ordinary shares on AIM will take place at the same time as the ordinary shares are admitted to the Official List and to trading on the London Stock Exchange's main market for listed securities, which is expected to occur in early December, subject to the receipt of the necessary approvals from the UK Listing Authority and the London Stock Exchange.
Afren has grown significantly since admission to AIM in 2005, and has assembled a portfolio of 16 assets across six African countries namely Nigeria, Côte d'Ivoire, Ghana, Congo Brazzaville, Gabon and Nigeria São Tomé and Príncipe Joint Development Zone. During this time Afren has established a stable production base in Nigeria from the Okoro development and in Côte d'Ivoire from Block CI-11.
Netherland, Sewell and Associates, Inc. ("NSAI") has produced a Competent Persons Report on the Company's reserves and resources, as a requirement for the prospectus to be published in connection with Admission to the Official List. NSAI has prepared its assessment of Afren's asset base as at 30 June 2009 (except with regard to Ebok where the assessment is at 15 October 2009), and has reviewed and incorporated field studies and data that were available up to that date. NSAI has taken into account the FDP approval for the Ebok Phase 1a development in its assessment from this date. Studies that were either underway prior to and completed since 30 June 2009 or work and studies undertaken post 30 June 2009 have not been taken into account.
Operations update
Acquisition of an interest in OPL 310 offshore Nigeria
Awarded to indigenous company Optimum Petroleum in 1992, OPL 310 is located in the Benin Basin offshore western Nigeria. Afren has farmed-in to the block as technical operator and will hold a 40 per cent. legal interest and a 70 per cent. effective working interest. Located adjacent to the highly prospective Aje field (recently declared commercial), OPL 310 represents a high impact shallow to deep water exploration opportunity in the under explored western Nigeria offshore area. The existing seismic database covering the area has been acquired, and work has commenced to further assess the prospectivity of the block and define a forward work programme. There are several prospects already identified in the Cenonian, Turonian and Albian sandstone reservoirs, with trapping configurations typically 4-way dip closures over basement highs.
Of particular interest to Afren is the hydrocarbon potential that exists within the Upper Cretaceous (Cenonian and Turonian) horizons, which correspond to the proven hydrocarbon bearing zones at the Company's Blocks CI-11 and CI-01 in Côte d'Ivoire and also to equivalent intervals of primary prospectivity at the Company's Keta Block in Ghana. Afren has attributed mean unrisked resources of 330 million barrels to the block.
Through application of current understanding of the Cretaceous depositional model at OPL 310, Block CI-01 and the Keta Block, Afren has assembled an attractive, high impact exploration inventory in one of Africa's most prolific emerging oil and gas plays.
Ebok-5 appraisal well drilling update
As announced on 3 November 2009, Ebok-5, currently being drilled by the Transocean Adriatic IX jack up drilling unit has encountered a total oil column of 266 ft in the D1 and LD-1E reservoir sands ranging in measured depth from 2,341 ft to 3,090 ft. The Ebok-5 appraisal well is currently drilling below 3,350 ft and will continue to test deeper objectives.
Afren's pre-drill volumetric estimates for the Ebok West Fault Block were 92 mmbbls STOIIP with 2P recoverable volumes of 25 mmbbls. The Ebok-5 well results to date validate Afren's amplitude based model of the Ebok field.
Development of the broader Ebok - Okwok complex
On 3 November 2009, the Board of Afren announced that the FDP for the Phase 1a development of the Ebok Field has been approved by the Department of Petroleum Resources in Nigeria. According to the FDP, development drilling will commence once the Ebok-5 (drilling ahead) and Ebok-6 appraisal wells have been completed. The Phase 1a development plan comprises five horizontal oil production wells in the D2 reservoir, one horizontal oil production well targeting the D1 reservoir and one water injection well in the central Fault Block 1 and Fault Block 2 areas of the field. All wells will be drilled from a single field location via a Well-head Support Structure ("WSS") and mobile offshore production unit ("MOPU"). Afren will then drill three horizontal production wells and one water injector targeting the D2 Southern Lobe.
Following completion of the initial development phases, it is planned that the second phase development will be launched, incorporating the full development of the D1 reservoir (Fault Block 1 & 2 areas) and Fault Block West, whilst appraising the potential within the West Flank Qua Iboe structure (150 mmbbls STOIIP, estimated 45 MMbbls recoverable resources) and Fault Block North (30 MMbbls STOIIP, estimated 9 mmbbls recoverable resources).
The recent acquisition of the adjacent Okwok Field, significantly enhances Afren's assessment of the resource potential of the greater Ebok - Okwok petroleum complex. Afren currently plans to drill one appraisal well at Okwok in mid 2010, and is engaged in studies to determine the optimal well location and development concept, maximising on development synergies with Ebok.
|
Target |
Well type |
Gross Best estimate Resources - Appraisal Upside MMbbl |
Indicative Timing / Result |
|
Ebok West Fault Block |
App |
25 |
Oil |
|
Ebok D2 Southern Lobe |
App |
8 |
Q4 09 |
|
D2 base case |
Prod |
n/a |
Q1 10 |
|
D2 base case |
Prod |
n/a |
Q1 10 |
|
D2 base case |
Prod |
n/a |
Q1 10 |
|
D2 base case |
Prod |
n/a |
Q1 10 |
|
D2 base case |
Prod |
n/a |
Q2 10 |
|
D1 base case |
Prod |
n/a |
Q2 10 |
|
Ebok D2 Upside Extension |
App |
12 |
Q2 10 |
|
Ebok West Flank Qua Iboe |
Exp |
45 |
Q2 10 |
|
Okwok |
App |
70 |
Q3 10 |
|
Ebok North Fault Block |
App |
9 |
Q1 11 |
|
Total |
12 |
169 |
Production ahead of guidance at Okoro
Year to date production to 31 October was 5,714,840 barrels of oil (gross), equivalent to an average daily production rate of 18,800 bopd, representing a significant out-performance compared to initial production expectations. The production process is stable with all instrumentation functioning as required and the offtake process and export of the produced crude oil is running smoothly.
Continuing sub-surface and reservoir management work has identified two attractive infill drilling locations that will add incremental reserves and production, utilising the two remaining well slots available at the Okoro wellhead platform.
Stable production in Côte d'Ivoire
Oil production at CI-11 to 31 October was 389,542 barrels of oil (gross), equivalent to an average daily production rate of 1,281 bopd. Natural gas production at CI-11 was 9.9 bcf (gross), equivalent to an average daily production rate of 32.7 mmcfd. Also during this period 362,543 barrels of oil equivalent of natural gas liquids were stripped from the inlet gas stream at the Lion Gas Plant, equivalent to 1,193 boepd. Maintenance work continues on CI-11, prior to commencing planned wireline workovers on a number of the wells.
Subsurface evaluation work is also ongoing, focusing in particular on applying the latest understanding of the Cretaceous depositional model, with the aim of finalising infill drilling opportunities at CI-11 to target the remaining upside potential. Rig based workover opportunities will also be co-ordinated with this programme, which is expected to prove up additional reserves and increase production rates.
Osman Shahenshah, Chief Executive of Afren, commented:
"During the last four years, Afren has established itself as a leading London listed African independent. Afren has delivered both acquisition led and organic reserves and production growth, demonstrating its technical competence on the Okoro greenfield development, recent successes on the Ebok appraisal drilling and production outperformance on both Okoro and Côte d'Ivoire. The Board now considers, having regard to the Company's established track record, upgraded reserves and resource base, operational achievements and future production and reserves outlook, the Official List to be a more appropriate platform for the continued growth of the group. Drilling activity will be targeting over 600 mmboe to 2011 and we are expecting production growth to 100,000 bopd by the end of 2012."
Analyst Presentation
A presentation for analysts will be held at 15:00 on Wednesday 4 November at Bank of America Merrill Lynch, 2 King Edward Street, London EC1A 1HQ.
For those unable to attend in person, a dial in facility will be available. To access this facility, please dial:
0208 817 9301 Local London
0800 634 5205 Freephone UK
Presentation materials can be reviewed from 07:00 on the Afren website (www.afren.com).
|
Afren plc |
+44 20 7451 9700 |
|
Osman Shahenshah |
Chief Executive |
|
Galib Virani |
Head of Acquisitions and Investor Relations |
|
NOMAD - Jefferies Jack Pryde Paul Wheeler Pelham Public Relations |
+44 20 7029 8000 +44 20 7337 1500 |
|
James Henderson |
|
|
Mark Antelme |
Note
In accordance with the AIM Rules, the technical information in this release has been reviewed and signed off by Mr Iain Wright, who is Technical Director at Afren plc and has over 25 years relevant experience within the sector. He consents to the information in the form and context in which it appears. The Company estimates its reserves in accordance with the guidelines and definitions of the 2007 SPE/WPC/AAPG/SPEE Petroleum Resource Management System ("PRMS") Classification System.
Related Shares:
AFR.L