8th May 2007 07:02
Afren PLC08 May 2007 Afren plc (AIM: AFR) Afren enters into a Farm-In Agreement with Independent Energy for participation in the Ofa Field London, 8 May 2007 - Afren plc ("Afren" or "the Company") announces that it hasentered into a Farm-In agreement with Independent Energy Limited ("IEL") for aninterest in the Ofa Field, located in the Northern Niger Delta. The Board of Afren is delighted to announce that it has entered into anagreement with IEL, an established indigenous Oil & Gas company, to farm into -and jointly develop - the Ofa Field ("Ofa"). IEL was awarded a 100 percentinterest and operatorship of Ofa under the Federal Government of Nigeria'sMarginal Field Programme. Ofa is an undeveloped oil field in OML 30 located onshore in the Northern NigerDelta: •A recent independent assessment by Gaffney, Cline & Associates estimates mean Stock Tank Oil Initially in Place ("STOIIP") of up to 150 mmbbls. •The field is covered by good quality 3D seismic data and consists of up to eight oil bearing reservoir intervals in the Agbada Formation between 6,670 and 7,280 feet. •Ofa is located close to existing infrastructure and within 15km of a number of Shell producing fields, including Afiesere, Eriemu, Kokori, Oweh, Olomoro and Ogini. The field was initially discovered by Shell (Ofa-1) and subsequently appraisedby the Ofa-2 well: •The Ofa-1 exploratory well was drilled as a vertical well on the crest of a roll-over anticline structure to a total depth of 10,000 feet. •Shell initially reported oil in three reservoir levels and the well was suspended as a discovery. •The Ofa-2 appraisal well was drilled directionally on the southern flank of the structure at a distance of 3km south of Ofa-1 and encountered gas and condensate. The forward work programme includes a well test scheduled for Summer 2007. Thetest involves re-entry of the Ofa-1 discovery and will test four out of theeight identified oil bearing zones. In addition, several cased hole logs will berun to confirm and update contacts in two key reservoirs, with the potential toadd additional volumes. During the test, relevant reservoir parameters and crudesamples will be collected for further analysis to optimise the development ofthe field. All the necessary contracts for the well test are in place andmobilisation to site is expected shortly. The Farm-In Agreement signed between Afren and IEL defines the commercial termsunder which Afren will participate with IEL in the development of Ofa, and issubject to requisite approvals. Under this agreement, Afren will be responsiblefor paying all costs for the development of the field, and will recover thecosts from 80 percent of net field revenues. Following cost recovery Afren andIEL will share production revenue equally. Osman Shahenshah, Chief Executive of Afren, commented: "I am delighted to have formed another important partnership with a wellestablished indigenous company. Participation in the development of the OfaField, a material near-term project with the potential to expand our currentproduction target of 15,000 to 20,000 bopd in 2008, is a significant addition tothe portfolio and is consistent with Afren's business model of partnering withindigenous companies in near-term production opportunities, with low costdevelopment options." 8 May 2007 Enquiries: Afren plc +44 20 7182 1800Osman Shahenshah Chief ExecutiveEvert Jan Mulder Chief Operating OfficerGalib Virani Investor Relations Jefferies International Limited +44 20 7618 3500Toby HaywardJack Pryde Tristone Capital Limited +44 20 7399 2480Simon Ashby-RuddMajid Shafiq Pelham Public Relations +44 20 7743 6673James HendersonAlisdair Haythornthwaite Background information Afren Plc Afren (www.afren.com) was founded in December 2004 by a management teamincluding Dr Rilwanu Lukman, (Chairman), Osman Shahenshah, (Chief Executive) andBert Cooper (Advisor to the Board), with the vision to become the premier panAfrican independent Exploration and Production company. Since its listing on theAIM market of the London Stock Exchange, Afren has rapidly expanded itsportfolio and the management team has delivered nine assets in the JointDevelopment Zone of Nigeria Sao Tome and Principe, Nigeria, Gabon, Angola andCongo Brazzaville. Afren will continue to add to its diversified portfolio of near term developmentand high impact exploration, with the overall objective of creating substantialshareholder value. Independent Energy Limited Independent Energy Limited ("IEL") was established in 2000 as an indigenousexploration and production company. IEL was awarded a 100 percent interest andoperatorship of the Ofa Field, located onshore in Shell's OML 30 in the NorthernNiger Delta, in 2004. IEL has a strong and diverse Board and Management team including Dr BamangaTukur, Murtala Yar'Adua, Dr Steve Uhonmwangho, Mahmud Tukur, ChukwuemekaIkelionwu and Shamsudeen Bello. Note In accordance with the AIM Rules, the drilling update information in this reporthas been reviewed and signed off by Dr Nick Johnson, who is Head of Explorationand Production at Afren Plc and has over 25 years relevant experience within thesector. He consents to the information in the form and context in which itappears. The Company estimates its reserves in accordance with the guidelinesand definitions of the Society of Petroleum Engineers/World Petroleum Congress("SPE/WPC") reserves classification (March 1997) using accepted engineeringprinciples. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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