1st Apr 2008 07:00
Afren PLC31 March 2008 Afren plc (AFR LN) Afren enters into a Farm-In Agreement with Oriental Energy Resources for the development of the Ebok Field, offshore Nigeria Afren plc ("Afren" or the "Company") announces that it has entered into afarm-in agreement with Oriental Energy Resources Limited ("Oriental") for thedevelopment of the Ebok Field, located offshore South East Nigeria. Background Afren has entered into its sixth indigenous partnership in Nigeria, withOriental, to jointly develop the Ebok field ("Ebok"). Oriental was awarded a100 per cent. interest and operatorship of Ebok in May 2007 by the ExxonMobil /Nigerian National Petroleum Corporation ("NNPC") Joint Venture. The farm-outhas been structured such that the field benefits from the Nigerian MarginalField Fiscal and Tax Regime. In addition, Afren has negotiated a collaborativeagreement with Oriental on other potential development assets in the region. Field technical description Ebok is an undeveloped oil field located in OML 67, 50 km offshore in 135 ft ofwater in Nigeria's prolific south eastern producing area. The field wasdiscovered by the ExxonMobil / NNPC JV in 1968 (M-QQ1 (Ebok-1)), and twosubsequent appraisal wells were drilled in 1970 (Ebok-2 and Ebok-3). A total of271 ft. (83m) of net oil pay was encountered in Ebok-1 in four sands between2,600 ft. (800m) and 3,600 ft. (1,100m); none of the zones were productiontested. 24 degree API oil was recovered from Ebok-1. > Afren estimates that the field contains Stock Tank Oil Initially In Place ("STOIIP") of 77 - 167 million barrels (mmbbls) (P90 - P10) in the two fault blocks tested by Ebok-1 and Ebok-2 with a mean of 118 mmbbls. > Recoverable reserves in excess of 25 mmbbls based on analogous 20 - 45% recovery factors. > Additional low risk appraisal potential is recognised in the adjacent undrilled Ebok West fault block which is estimated to have mean STOIIP of 63 mmbbls. > Additional exploration potential is recognised in the Ebok North prospect with estimated mean STOIIP of 30 - 50 mmbbls and also in the deeper Qua Ibo sands. > The Ebok area is covered with good quality 1992 3D seismic data and an extensive data set is available for the three drilled wells. > Ebok is located close to several producing ExxonMobil / NNPC JV fields and 55 km south-east of ExxonMobil's onshore QIT Terminal. Forward drilling programme The appraisal and development drilling programme will follow a similar fasttrack schedule to Afren's Okoro Setu Project: > Appraisal drilling is scheduled for Q4 2008 with the objectives to acquire high quality oil samples, establish well deliverability, and acquire the reservoir data required for optimising the development plan; and > Following a successful initial appraisal drilling outcome; submission of a Field Development Plan is anticipated for 2009 and first commercial oil production from Ebok could commence as early as Q1 2010. Commercial terms The Farm-In Agreement signed between Afren and Oriental defines the commercialterms under which Afren will participate with Oriental in the development ofEbok, and is subject to requisite Government and Farmor approvals. Under thisagreement, Afren will pay a farm-in fee payable in cash and / or Afren shares,which can be satisfied by existing resources. In addition, Afren will beresponsible for funding all capital and operating costs for the development ofthe field, and will recover the costs from 100 per cent. of net field revenues. Following cost recovery, the ExxonMobil JV will receive a Net Profit Interest,with Afren and Oriental sharing in net production revenues equally. Presentation materials Presentation materials relating specifically to today's announcement areavailable at the Company's website: www.afren.com. Osman Shahenshah, Chief Executive of Afren, commented: "We are delighted to have entered into an agreement with Oriental Energy, whichwas awarded the Ebok field by the ExxonMobil / Nigerian National PetroleumCorporation JV. Ebok is a material proved undeveloped opportunity, with thepotential to add significant reserves and production to Afren's portfolio. As welook beyond First Oil, we are delighted to have established this uniquecollaboration with Oriental to further grow our portfolio from Ebok and thedevelopment of other potential assets from the Majors in Nigeria." Alhaji Mohammed Indimi, Chairman of Oriental, commented: "We are very pleased to have formalised our relationship with the founders ofAfren. The partnership with Afren is highly complementary and we look forwardto jointly developing the Ebok field. In addition, we see tremendous futureopportunities in relation to our collaborative agreement with Afren, to jointlydevelop further farm-out opportunities in this prolific area, where a largenumber of undeveloped discovered oil fields similar to Ebok are good candidatesfor future development." Enquiries: Afren plc +44 20 7451 9700Osman Shahenshah Chief ExecutiveEvert Jan Mulder Chief Operating OfficerGalib Virani Head of Acquisitions and Investor Relations Jefferies International Limited +44 20 7029 8000Toby HaywardOliver Griffiths 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. Afren has built anexecutive and non-executive management and advisory team with broad andextensive experience in the industry, both in West Africa and internationally inidentifying and completing corporate expansion opportunities and in publiccompany financing. Afren also looks to leverage key relationships across theregion to gain preferential access to opportunities. Oriental Energy Resources Limited Oriental Energy Resources (www.oriental-er.com) Limited is a privately heldNigerian oil exploration and production company with its headquarters in Abuja,the Federal capital of Nigeria. In addition to the Ebok Field, Oriental is theOperator of the Okwok Field and OML 115, an oil mining lease located near Ebokin southeastern offshore Nigeria. Note In accordance with the AIM Rules, the technical information in this release hasbeen reviewed and signed off by Dr Nick Johnson, who is Head of Exploration atAfren Plc and has over 25 years relevant experience within the sector. Heconsents to the information in the form and context in which it appears. TheCompany estimates its reserves in accordance with the guidelines and definitionsof the Society of Petroleum Engineers / World Petroleum Congress ("SPE/WPC")reserves classification (March 1997) using accepted engineering principles. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AFR.L