15th Aug 2007 07:01
Afren PLC15 August 2007 Afren plc (AIM: AFR) Operational update The Board of Afren plc ("Afren" or "the Company") is pleased to announce anoperational update. Highlights • Well test on the Ofa-1 well on the Ofa field is currently on-going. The deeper horizon has been tested successfully and flow rates of up to 1,000 bopd achieved on a 20" choke. • Development drilling on Okoro Setu commencing in Q4 2007 with a target of first oil in early 2008 and production of 15,000 to 20,000 bopd by mid 2008. • High impact exploration drilling in La Noumbi, Congo in August 2007. • Exploration drilling on Themis Marin in Gabon scheduled for Q4 2007. • Preparatory work for the Eremor development on-going (Field Development Plan approved). Ofa development, Nigeria The Ofa well test is on-going; mobilization to site occurred in early July andthe deepest hydrocarbon bearing zone (N4000) has been tested at a depth of 7,200feet and flow rates of up to 1,000 bopd on a 20" choke have been achieved.Furthermore, various parameters have been established and crude samples takenfor analysis to optimise future drilling and development of the field. Afrenand its partner Independent Energy Limited successfully deployed an ElectricSubmersible Pump ("ESP") during the testing programme. The next stage of thework programme, which is testing of shallower oil bearing zones, is currently inprogress. Eremor development, Nigeria The Company recently signed an agreement with the indigenous company Excel forthe development of the Eremor Field. Phase I of the Field Development Planincludes re-entry and completion of the existing well and construction of a7-kilometre oil evacuation line to the nearest flow station. The FieldDevelopment Plan and Environmental Impact Assessment have been approved anddevelopment work will commence in the near term. Okoro Setu development, Nigeria Following the successful appraisal drilling programme, completed in December2006, Afren has put in place the drilling capability, financing structure,development plan and production capacity for the Okoro Setu Project. All majorcontracts have been awarded including the drilling rig, Floating ProductionStorage and Offloading vessel ("FPSO"), drilling consumables, the well headdecks and flexible flow lines. The FPSO vessel, the Armada Perkassa, is currently moored in Keppel Shipyard inSingapore and is undergoing a planned systems upgrade to meet projectrequirements, including the addition of a test separator and gas liftcompressor. It is expected that the FPSO will arrive on location in December. The company is therefore on track to achieve its target of first oil in early2008 and production of 15,000 - 20,000 barrels per day in mid 2008. La Noumbi, Congo The first well to be drilled, in August, is on the Doungou prospect. Afren hasa 14% working interest and the operator is Maurel et Prom. The La Noumbi 2Dseismic acquisition programme is on-going with 200km 2D planned, focussed on theNorth West of the licence. The processing should be complete by Q4 2007. Themis Marin, Gabon A well on the Admiral prospect on the Themis Marin license is expected in Q42007. Afren has a 12.86% stake and the operator is Sterling. Osman Shahenshah, Chief Executive of Afren, commented: "We are delighted with the initial results from the Ofa well test, havingachieved a flow rate of up to 1,000 bopd from the deepest hydrocarbon bearinghorizon, while we continue the testing programme in the shallower intervals. Weare looking forward to development drilling on Okoro Setu scheduled for Q4 2007,in addition to executing phase one of the Eremor development plan andexploration drilling in Congo and Gabon. We therefore remain focused on firstoil in early 2008, 15 to 20,000 bopd from Okoro Setu by mid-2008 and continue toevaluate our strong new ventures pipeline." 15 August 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 HaywardOliver Griffiths Tristone Capital Limited +44 207 355 5800Simon 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. Afren's Chief OperatingOfficer is Evert Jan Mulder, who was most recently Chief Operating Officer ofAddax Petroleum, Nigeria's largest independent oil producer. Since its listing on the AIM market of the London Stock Exchange, Afren hasrapidly expanded its portfolio and the management team has delivered 11 assetsin the Joint Development Zone of Nigeria-Sao Tome and Principe, Nigeria,Gabon, Angola and Congo Brazzaville. In addition, Afren has built an executiveand non-executive management and advisory team with broad and extensiveexperience 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. Afren will continue to add to its diversified portfolio of near term developmentand high impact exploration, with the overall objective of creating substantialshareholder value. Current portfolio Nigeria Afren is partnered with indigenous companies on all four assets in Nigeria.This is consistent with the strategy and commitment of partnering withindigenous companies to target low cost development options that yield near-termproduction. • Okoro Setu development - Two appraisal wells were successfully drilled in Q4 2006 by Afren, the Technical Service Provider. A nine-month rig contract is in place for the Adriatic VI, with development drilling due to commence in Q4 2007. An FPSO has been secured, reserves certified by Netherland, Sewell and Associates (2P of 32 mmbbl) and the Field Development Plan has been approved by the Department of Petroleum Resources in Nigeria. First oil is targeted in early 2008 and on track for 15 to 20,000 bopd of oil achieved by mid 2008. • Ofa development - Discovered by Shell in 1970. Upon a successful well test, production should be achieved within eight to nine months at up to 4,000 bopd. • Ogedeh development - Existing discovery made by Chevron in 1993 in an area lying close to existing infrastructure. Various development options are currently under review. • Eremor development - Initially discovered by Shell in 1978. Phase I of the approved Field Development Plan is to re-enter and complete Eremor-1. Angola Cabinda Block B Heads of agreement have been signed for a 5 per cent. interest in Block B, ahigh quality exploration license containing existing discoveries (32 wellspreviously drilled without Seismic (4 wells testing light oil and 7 wells withoil shows). A 2D seismic programme is planned, followed by a 5-well explorationprogramme from 2008 onwards once Force Majeure is lifted. Congo The La Noumbi field (Afren: 14% interest) lies adjacent to the M'Boundi fieldand contains a number of high impact exploration opportunities. A well will bedrilled on the Doungou prospect in August 2007. Gabon Afren has interests in Themis and Iris Marin (12.86%) and the Ibekelia StudyArea (20%), which offer low cost exploration upside. The Admiral prospect inThemis Marin is due to be drilled in H2 2007. Nigeria - Sao Tome Joint Development Zone Afren's 4.41% interest in Block 1 of the JDZ offers exposure to a world classexploration acreage and in March 2006 Chevron made the Obo-1 discovery whichcontained 150 feet of net pay and proved a working hydrocarbon system in theJDZ. Note In accordance with the AIM Rules, the drilling update information in this reporthas been reviewed and signed off by Evert Jan Mulder, who is Chief OperatingOfficer 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:
AFR.L