3rd Jul 2009 07:00
Afren plc (AFR LN)
First Hydrocarbon Nigeria Limited
London, 3 July 2009 - Afren plc ("Afren" or the "Company") announces that First Hydrocarbon Nigeria Company Limited ("FHN") has been established to be a majority Nigerian owned oil and gas company in the indigenous Nigerian Exploration & Production ("E&P") sector.
Strategic rationale
In direct response to the Nigerian government's objective to increase the level of local participation in the oil and gas sector and in line with the Company's strategy, Afren has established FHN with the support of two leading Nigerian financial institutions: First City Monument Bank Plc ("FCMB") and Guaranty Trust Bank Plc ("GTBank"). Afren has demonstrated its long-term commitment to working in partnership with indigenous companies and empowering local management in Nigeria; Afren also has a strong track record of working with Nigerian contractors and financial institutions. FHN has been created to build on - and extend - this platform. It will be fully capitalised at the time of consummating new acquisitions.
FHN will fulfil the Nigerian government's criteria for indigenous operators, and will be used as a vehicle to acquire substantial oil and gas assets in Nigeria, including stakes in assets currently under negotiation, assets that may become available that are currently held by international independents and by the joint ventures between the Nigerian government and International Oil Companies, and assets that may be divested in connection with indigenous licensing rounds. FHN will also investigate opportunities to acquire the assets of other Nigerian indigenous companies, as appropriate.
Over time, FHN will be owned by a wider Nigerian stakeholder base, ensuring diversity of ownership and a reflection of Nigeria's national character. Subject to market conditions, it is the intention that FHN will seek a listing on the Nigerian Stock Exchange in due course. FHN has been assisted in this task by FCMB and GTBank as financial advisors in Nigeria and Morgan Stanley as international advisor, Deloitte LLP as tax and audit advisor, and White & Case LLP as international legal advisor.
Background
Afren was founded in late 2004 with the vision to become the premier pan-African independent exploration and production company. The Company has pursued a differentiated strategy based on partnerships with indigenous companies, African National Oil Companies and Governments. The Company has a strong African representation in its board of directors and amongst its management and shareholders. Afren is also committed to working towards a solution to monetise the vast untapped gas reserves in the Gulf of Guinea, as evidenced by its cooperation with EdF, E.ON Ruhrgas and Gasol plc. Over this period, the Company has acquired stakes in 15 assets across 6 African countries, and currently has production of circa 26,000 boepd and 2P recoverable reserves from existing projects of 86 mmboe, with net unrisked resources from its exploration portfolio in excess of 500 mmboe.
Afren has established a strong presence and track record in sub-Saharan Africa's largest resource base, Nigeria, and has demonstrated its long-term commitment to working in partnership with indigenous companies and fully capitalising on local management expertise. More than 70% of the Company's existing reserves and production originates from Nigeria. In early 2009, Afren announced the successful appraisal of the Ebok development (in partnership with Oriental Energy Resources, Nigeria National Petroleum Corporation and Exxon Mobil), which is set to deliver an additional 35,000 barrels of oil per day by the end of 2010.
FHN has been established to capitalise on the Company's existing platform and to actualise the Company's vision of achieving broader African ownership in the upstream sector.
Governance
The initial board of directors will comprise of Egbert Imomoh, (Chairman, Afren), Alhaji Magaji Muhammad Inuwa, Chief (Dr) Oladele Fajemirokun, Dr Jonathan Long (Chairman of FCMB), Constantine Ogunbiyi (Director, Afren), Ethelbert J.L. Cooper (Co-Founder of Afren), a nominee from GTBank's board and Osman Shahenshah (Chief Executive, Afren).
Biographical data of the board is as follows:
Egbert Imomoh:
Prior to his present position as Chairman of Afren Plc, Mr Imomoh, a founder of Afren, was Managing Director and Executive Chairman of Afren Energy Resources Limited. He successfully led the growth of Afren's Nigerian asset base, established partnerships with indigenous companies and realised the First Oil milestone at the Okoro Setu project. Mr Imomoh served as Deputy Managing Director of Shell Petroleum Development Company (Nigeria), one of the Shell Group's largest operating companies, which is responsible for operating the joint venture that produces approximately one million barrels of oil per day. He is also a member of the Society of Petroleum Engineers and has served on its board as Regional Director for Africa.
Magaji Mohammed Inuwa:
Alhaji Inuwa has over 40 years experience in the Nigerian mining and steel industry. He has acted as Board member and Chairman of several companies including Makeri Smelting Company, Netcodietsmann Nigeria Limited, amongst others. He was until recently the Chairman of the Federal Government and Steel Companies Administrative Panel of Enquiry and he was a member of the Oil and Gas Reform Implementation Committee. He holds a Bachelors degree in Physics and Chemistry. He is a Fellow of the Institution of Materials, Minerals and Mining and the Nigeria Metallurgical Society, as well as a member of the Nigeria Mining and Geosciences Society.
Chief (Dr) Oladele Fajemirokun:
Chief Fajemirokun is Chairman and Director of several companies, including American International Insurance Company Plc (AIICO Plc Group), Xerox HS, Food Concepts and Entertainment Group, Kings Guard Group Limited and Multishield Limited. He has a BSc in Economics from the University of Ife (now Obafemi Awolowo University) and is an Honorary Doctor of Business Administration from City University Los Angeles, USA. He is also a fellow of the Institute of Directors.
Dr Jonathan Long:
Dr Long is the Chairman of FCMB. He holds Bachelors and Masters degrees from Balliol College and a Doctorate degree from St. Antony's College, both at Oxford University in the United Kingdom. He has over twenty five years corporate finance experience working in merchant banking in the United Kingdom, Switzerland and Nigeria. He was a Manager, Corporate Finance, with Charterhouse Japhet Limited in London, where he was involved with the establishment of Charterhouse Petroleum Securities Limited as well as advising jointly with City Securities on a proposed restructuring of the Nigerian National Petroleum Corporation in 1979. He joined First City Merchant Bank Limited in 1985 as Deputy Managing Director, was appointed Managing Director in 1987 and subsequently Chairman in 2005. Over the last twenty four years, he has led numerous project teams advising the Nigerian Government, major multinational clients or large local corporate institutions on major financial transactions. He is also a director of Kakawa Discount House Limited.
Ethelbert Cooper:
Mr Cooper is an Economics graduate from Yale University and has been active in the African natural resources sector for over 25 years. During the 1980s he devised and led an initiative to restructure what, at the time, was Liberia's biggest industrial project - an iron ore mining company with capital investment of over US$600 million. Mr Cooper also formed Liberia's principal mining parastatal, whose management, marketing and financing requirements were previously contracted to Mr Cooper's companies. Mr Cooper - a Liberian national - led the team that founded Afren.
Osman Shahenshah:
Mr Shahenshah is a founder of Afren. He has over 20 years experience of oil and gas finance. His international career began with Credit Suisse First Boston and has included senior positions in the oil and gas finance groups of the International Finance Corporation (private sector arm of the World Bank), and the investment banking divisions of Dresdner Kleinwort Wasserstein and Mediocredito Centrale. Mr Shahenshah has been actively involved in the African Oil & Gas sector for more than 15 years, working with companies including Shell, Chevron, Total, ENI and the Nigerian National Petroleum Corporation. He holds a PhD from the University of Pennsylvania, a Master's Degree from Columbia University and a Bachelor's Degree from Brown University.
Constantine Ogunbiyi:
Mr Ogunbiyi is a founder of Afren and he has served as an Associate Director and Special Assistant to the previous Chairman, General Counsel for the Group as well as a Director of Afren's Nigerian wholly-owned subsidiaries. He has significant and extensive experience of private equity, acquisition, structured, trade and project finance, and public and private partnerships in the African energy and infrastructure sectors in particular. Prior to joining Afren, he was the Deputy Head of Cadwalader, Wickersham & Taft LLP's Africa Practice. Before this, Mr Ogunbiyi spent over four years with Herbert Smith's International Finance and Banking Department. He has also served as a strategic adviser to the New Partnership for Africa's Development (NEPAD) Business Group and the Southern African Development Community's (SADC) Banking Association's PPP Unit. He holds Legal Qualifications from the universities of London (King's College), Passau (Germany) and Oxford.
Egbert Imomoh, Chairman of Afren, commented
"Afren has established a strong track record of working with indigenous companies in Nigeria, in line with the Company's strategy since inception. I am very proud to be leading the establishment of First Hydrocarbon Nigeria Limited, as a majority Nigerian owned oil and gas champion in the indigenous Nigerian E&P space. We strongly believe the indigenous E&P sector has the potential to become a major force within the Nigerian upstream arena and the establishment of FHN is a demonstration of our commitment to this objective."
Tayo Adenirokun, Managing Director of GTBank , commented
"GTBank has lent strong support to Afren in Nigeria, since its participation in the debt facility to finance the Company's flagship Okoro project in Nigeria. We are delighted to be alongside Afren, at the forefront in helping to fulfil the Government's objective of growing the indigenous participation in the Nigerian upstream sector."
Dr Jonathan Long, Chairman of FCMB, commented
"We welcome and support this initiative to create an indigenous Nigerian E&P champion. Afren has worked extensively with Nigerian communities, partners and contractors since inception, and we look forward to helping to encourage a wider Nigerian ownership of prized Nigerian oil and gas assets."
Enquiries:
Afren plc +44 20 7451 9700
Osman Shahenshah Chief Executive
Galib Virani Investor Relations
Pelham Public Relations +44 20 7337 1500
James Henderson
Mark Antelme
Notes to editors
First City Monument Bank
First City Monument Bank (www.firstcitybank.com) is a universal banking institution headquartered in Lagos, Nigeria with a nationwide network of about 150 branches and several subsidiaries. FCMB is the flagship company of the First City Group, one of Nigeria's leading comprehensive financial services providers. Since FCMB's establishment as First City Merchant Bank Limited in 1982, FCMB has distinguished itself in the provision of superior financial services to a broad clientele. Following a universal banking license in 2000 the bank's name was changed to First City Monument Bank Plc, retaining its popular acronym, FCMB.
FCMB has total assets in excess of US$3 billion and shareholders fund of over US$ 0.8 billion.
Guaranty Trust Bank
Guaranty Trust Bank plc (www.gtbplc.com) is a leading Nigerian banking institution incorporated in 1990 with a nationwide network of over 150 branches. It operates in three geographic regions: Nigeria, Rest of West Africa (comprising Ghana, Gambia and Sierra Leone) and Europe. Its subsidiaries include Guaranty Trust Bank Gambia, Guaranty Trust Bank Sierra Leone, Guaranty Trust Bank Ghana and Guaranty Trust Bank UK Limited.
GTBank has over US$6 billion of total assets and shareholders funds in excess of US$ 1.1 billion.
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