3rd Mar 2008 07:00
Afren PLC02 March 2008 Afren plc (AIM: AFR) Afren signs Production Sharing Contracts for two licences in the gas rich Anambra Basin in Nigeria London, 3 March 2008 - Afren plc ("Afren" or "the Company") announces that, aspart of its strategy to aggregate and commercialise stranded gas assets inNigeria, the Company has signed Production Sharing Contracts ("PSC") for OPL 917and OPL 907, within the Anambra basin, onshore Nigeria. Highlights • Afren through a Joint Venture ("JV") with Global Energy Company Limited of Nigeria ("GEC") a leading Nigerian based international oil and gas company active in oil and gas services across the Gulf of Guinea, has signed PSCs for OPLs 917 and OPL 907 and a signature bonus of US$1.6 million for each licence has been paid by the licence participants. • The licences are located in the Anambra Basin, the second most prospective basin in Nigeria, with estimated remaining gas resources in excess of 5 trillion cubic feet ("Tcf") of gas, yet the basin remains largely unexplored with only 30 wells drilled to date leading to six discoveries. • The two licences cover an area totalling over 3,500 square kilometres. • Both areas contain existing discoveries that require further appraisal and a number of additional leads and prospects have been identified. o OPL 907 contains the Akukwa gas and condensate discovery, with estimated in place volumes of up to 400 billion cubic feet ("Bcf"). o OPL 917 contains the Igbariam gas and oil discovery, with estimated in place gas volumes up to 300 Bcf and oil in place up to 80 mmbbl. • The near term work programme includes additional data gathering and analysis on the existing discoveries. Additional high resolution 2D seismic data will be acquired over the existing discoveries later in 2008, prior to appraisal drilling in 2009. The seismic will also evaluate the identified exploration leads and prospects. Osman Shahenshah, Chief Executive of Afren, commented: "The announcement closely follows the cooperation agreement recently signed withE.ON Ruhrgas and African LNG to jointly investigate, develop, collect andmonetise gas for domestic and export purposes. The two licences, with previousexploration history and two discoveries, are located in the under-exploredAnambra Basin, where significant quantities of gas and condensate havepreviously been found. We are pleased to have also strengthened ourrelationship with GEC, marking our fifth indigenous partnership in Nigeria todate." Joe Obiago, Chief Executive of GEC, commented: "We are pleased to have formed the AGER joint venture with Afren and to havesuccessfully concluded Production Sharing Contracts on two highly prospectivegas rich licences in the Anambra Basin. This is a significant step forward inGEC's mission to be a major industrial player in the emerging gas utilisationmarket in Nigeria." Background to the Agreements The JV partnership, Afren Global Energy Resources ("AGER"), has taken a 41%interest in OPL 907 and a 42% interest in OPL 917, and will act as operator ofboth assets. The JV agreement between Afren and GEC defines the commercialterms under which Afren will participate with GEC in the exploration anddevelopment of the two licences. Afren has a combined 50% interest in the JV,with GEC holding the remaining 50%. OPL 907 Four shallow coreholes were drilled by Shell prior to the Akukwa-1 (1955) andAkukwa-2 (1956) wells that were drilled by Shell/BP. The Akukwa-1 wellencountered gas and condensate in Cretaceous sandstones but was not fullyevaluated. The Akukwa-2 appraisal well found approximately 500ft net gas pay inseveral horizons and produced dry gas on test. The first stage of the initial work programme involves evaluating existing data,followed by the acquisition of 1,000 km of 2D seismic and the drilling of one ormore appraisal wells on Akukwa. Other participants on the licence are Buston Energy Resources Ltd (25%), AllenneExploration & Production Ltd (14%), Kaztec Engineering Ltd (5%), VP Energy Ltd(3%), De Atai Oil Services Int'l Ltd (2%) and Bepta Oil & Gas Ltd (10%). OPL 917 Two wells were previously drilled on the licence by Shell/BP. Igbariam-1 (1971)encountered gas and condensate with a reported 196ft net gas column and a 30ftcondensate/oil column in Cretaceous sandstones; the well was not tested. Thesubsequent Ajire-1 well (1972) was water wet. A number of prospects and leads have been identified south of the discoverywell. The first stage of the work programme will be to carry out a fullevaluation of the existing data, prior to acquiring new 2D seismic over theIgbariam discovery and identified leads and prospects, prior to appraisaldrilling on the Igbariam field. Other participants on the licence are Petrolog Oil & Gas Ltd (18%), VP EnergyLtd (17%), De Atai Oil Services International Limited (10%) and Goland PetroleumDevelopment Co. Limited (13%). The JV partners will also initiate a community engagement programme in theregion. 3 March 2008 Enquiries: Afren plc +44 20 7451 9700Osman Shahenshah Chief ExecutiveEvert Jan Mulder Chief Operating OfficerGalib Virani Investor Relations Jefferies International Limited +44 20 7029 8000Toby HaywardOliver Griffiths Tristone Capital Limited +44 20 7355 5800Simon Ashby-RuddMajid Shafiq Pelham Public Relations +44 20 7743 6673James HendersonAlisdair Haythornthwaite Background information Global Energy Company Limited Global Energy Company ("GEC" - www.globalenergyco.com), is a Nigeria based,international energy resources & infrastructure services Group active in the inthe Oil, Gas, Power, Telecommunications & Process Industries in Nigeria andsub-Saharan Africa. The company has been a key player in the Oil and Gasservices sector and has been actively involved in the oil and gas explorationactivities that have taken place in the various sedimentary basins in Nigeriaover the past 15 years. The company has conducted front-end explorationactivities not only in Nigeria but in the Nigeria-Sao Tome & Principe JointDevelopment Zone, Angola, Equatorial Guinea and Congo. With the award of Niger Delta onshore OPLs 135 and offshore OPLs 2009 and 2010between 2005 and 2007, as well as its joint venture with Afren in OPLs 907 and917, the company is now positioned to become one of Africa's largest indigenousindependent oil and gas producers. 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;in identifying and completing corporate expansion opportunities and in publiccompany financing. Afren also looks to leverage key relationships across theregion to gain preferential access to opportunities. Since its listing on the AIM market of the London Stock Exchange, Afren hasrapidly expanded its portfolio and the management team has delivered a portfolioof assets in Nigeria, the Joint Development Zone of Nigeria-Sao Tome andPrincipe, Gabon, Angola, Congo Brazzaville and Ghana. Note In accordance with the AIM Rules, the technical update information in thisreport has been reviewed and signed off by Dr Nick Johnson, who is Head ofExploration and Production at Afren Plc and has over 25 years relevantexperience within the sector. He consents to the information in the form andcontext in which it appears. The Company estimates its reserves in accordancewith the guidelines and definitions of the 2007 SPE/WPC/AAPG/SPEE PetroleumResource Management System ("PRMS") Classification System. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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