12th Jun 2008 11:00
Afren plc (AIM: AFR)
("Afren" or the "Company")
AGM Statement
The following statement will be made by Dr Rilwanu Lukman, KBE, Legion d'Honneur, Chairman of Afren, at today's Annual General Meeting of the Company:
"When I stood before you a year ago, I said that Afren aimed to continue its development into the premier pan-African independent exploration and production company built on its unique and differentiated four pillar strategy; to maintain its pure play African focus, both geographically and in gaining from African expertise and experience in the Board and Management; partnering with indigenous companies; partnering with governments and national oil companies; and finding a solution to the vast untapped gas reserves in the Gulf of Guinea. I am delighted to say that over the past 18 months we have had considerable success in delivering on this strategy and we currently have a diversified portfolio of 16 assets in 7 African countries. Benchmarked over the last few years, this represents unparalleled portfolio growth amongst the peer group of international independents. Today, the Company is partnered with six indigenous companies in Nigeria, has formed a strategic partnership with PETROCI in Côte d'Ivoire, has entered into a Cooperation Agreement with E.ON Ruhrgas for the development of stranded gas in Nigeria and is on track for 15,000 barrels of oil per day from the Okoro Setu Project development.
Production from the Okoro Setu Project is an important contribution to the emerging Nigerian indigenous oil and gas sector. There are a large number of similar undeveloped assets, the majority of which are still owned by the Major International Oil Companies. Acreage is being increasingly awarded to indigenous companies who, in turn, are looking to partner with independents who can offer a combination of technical expertise and/or financial resources. This presents a compelling opportunity for Afren to make a significant contribution to Nigeria's production ambitions, through its partnership approach. The Company recently entered into a Farm-In Agreement with Oriental Energy Resources for the development of the Ebok Field, offshore Nigeria and has entered into a collaboration agreement with its partner to access other potential development assets from the Major International Oil Companies in Nigeria.
In relation to the Company's operations, we are now an established operator, having achieved the First Oil milestone from the Okoro Setu project in Nigeria in a period of only two years since signing the agreement with our indigenous partner. Initial production from the first two wells drilled to date have commenced at a combined rate in excess of 6,000 barrels of oil per day (bopd). The remaining wells will be batch drilled and the Company is on track to achieve full production of 15,000 bopd in Q3 2008.
Looking forward, we expect the next 12 months to be another transformational period for Afren as we look beyond full production from the Okoro Setu Project and continue to build our reserves and production base, both from the existing portfolio and the acquisition of further undeveloped resources. Production from the Okoro Setu project will be complemented with existing production, through completion of the acquisition of Devon Energy Corporation's interests in Côte d'Ivoire.
We expect first oil production on the Eremor field in Nigeria in Q4 2008. We aim to start appraisal drilling on the offshore Ebok field in Q4 2008 with an anticipated two well programme. In Gabon, Afren and its partners will commence drilling on the Charlie prospect on the Iris Marin Block by July 2008. In Ghana, where Afren currently has an operated interest, we will be drilling the high impact exploration well on the Cuda prospect in Q4 2008. Interest in the Ghana upstream sector has heightened considerably with the world class Jubilee discovery. The Cuda-1 well will be targeting an analogous prospect and offers an early opportunity to explore and gain a foothold in what is rapidly opening up as a truly world class hydrocarbon basin. In Angola, three wells are planned, commencing in Q4 2008 and two exploration wells are expected on the La Noumbi permit in Congo in late 2008.
Financially, we are in a strong position following an extremely successful equity placing in April 2008, raising a total of US$236 million equivalent, which enjoyed a very positive reaction from both existing and new shareholders, ensuring our existing work programme is fully funded with additional working capital to continue to grow the asset base, in addition of course to cash flow from existing production.
I remain extremely excited about Afren's future, and have no doubt that the Company's management team will continue to deliver for its shareholders and build upon the strong platform that has been established over the past few years."
12 June 2008
Enquiries:
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Afren plc |
+44 20 7451 9700 |
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Osman Shahenshah |
Chief Executive |
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Galib Virani |
Investor Relations |
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Jefferies International Limited |
+44 20 7029 8000 |
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Toby Hayward |
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Oliver Griffiths |
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Pelham Public Relations |
+44 20 7743 6676 |
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James Henderson |
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Alisdair Haythornthwaite |
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