21st Aug 2007 07:00
Afren PLC20 August 2007 Afren plc (AIM: AFR) US$50 million unsecured loan London, 21 August 2007 - Afren plc ("Afren" or "the Company") announces theclosing of a US$50 million unsecured loan. The Board of Afren Plc is delighted to announce that the Company, through itsNigerian subsidiary, has closed a US$50 million unsecured loan with First CityMonument Bank plc ("FCMB"). Background The proceeds of the US$50 million unsecured loan will be used primarily tofinance the Company's acquisition opportunities. The Company recently announcedan agreement with Excel, an established indigenous company, for the developmentof the Eremor field in Nigeria, taking the portfolio to 11 assets in 5countries. The Company is currently evaluating other near term developmentacquisition opportunities both in Nigeria and elsewhere in West Africa. FCMB is a leading and well established Nigerian bank and the loan endorses bothAfren's existing asset base and its future pipeline of opportunities. Afren wasfounded with the vision to become the premier pan-African independentexploration and production company through a strong African representation inits Board, Management, Partners and Shareholders. This latest initiativereinforces the recent steps to increase the African participation in Afren'scapital structure. Summary of the loan terms The US$50 million loan is unsecured, has a five year term, with interest payablesemi-annually at LIBOR plus 4.45 per cent. and Principal repayments commencingonly after 30 months. The loan is accompanied by 12 million detachable warrantsover the Company's ordinary shares, with a term of five years. The warrantshave been priced at 85 pence representing a premium of 42 per cent. to thecurrent share price. Osman Shahenshah, Chief Executive of Afren, commented: "The US$50 million loan provides further flexibility in the continued build-outof Afren's West African portfolio. This follows the recent syndication ofAfren's US$200 million Development Facility and its successful US$65 millionequity placement, both of which were over-subscribed. FCMB's strong localbacking of Afren is a testament to the Company's existing portfolio andpotential pipeline of acquisition opportunities. The continued support byNigerian financial institutions, including Guarantee Trust Bank plc'sparticipation in the US$200 million Development Facility, is both a strongendorsement to Afren's established credibility in its principal operating regionand to the maturity and funding capacity of the regional financial sector, as asupplement to Afren's traditional support base in North American and Europeancapital markets. Such local participation from the growing African CapitalMarkets base, complements Afren's focus on partnering with indigenous companiesin developing a pan-African portfolio of oil & gas upstream assets." Ladi Balogun, Chief Executive Officer of FCMB, commented: "We are proud to be associated with Afren, a well run company in an excitingspace. We expect that Afren will be able to increasingly tap into the localcapital markets to comfortably fund their expansion plans in the region. Withgreater choice of funding options, Afren will benefit from a lower cost ofcapital to accelerate its growth options. We look forward to working with Afrenon subsequent transactions, as we see this company continuing to holdsignificant promise in the future." 21 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 20 7355 5800Simon Ashby-RuddMajid Shafiq Pelham Public Relations +44 20 7743 6673James HendersonAlisdair Haythornthwaite Background information First City Monument plc ("FCMB") FCMB is one the leading and fastest growing banks in Nigeria and is ratedinvestment grade (A rating) by GCR, a leading international credit ratingagency. With total assets in excess of US$2.5 billion, the bank is focused oninvestment and consumer banking. FCMB was recognised as Nigeria's bestinvestment bank by Euromoney in 2007. The bank is listed on the Nigerian StockExchange, with 30% of its share capital being held by notable internationalemerging market investment funds. The transaction with Afren is consistent withthe bank's focus on international oil and gas finance. 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 drilledin Q4 2006 by Afren, the Technical Service Provider. A nine-month rig contractis in place for the Adriatic VI, with development drilling due to commence in Q42007. An FPSO has been secured, reserves certified by Netherland, Sewell andAssociates (2P of 32 mmbbl) and the Field Development Plan has been approved bythe Department of Petroleum Resources in Nigeria. First oil is targeted inearly 2008 and on track for 15 to 20,000 bopd of oil achieved by mid 2008. • Ofa development - Discovered by Shell in 1970. Afren and its partnerIndependent Energy Limited recently successfully tested the deepest hydrocarbonbearing Zone (N4000), which flowed at a stabilised flow rate of 1,000 bopd on a20/64" choke. The next stage of the work programme, which is testing of theshallower oil bearing zones, is currently in progress. • Ogedeh development - Existing discovery made by Chevron in 1993 in anarea lying close to existing infrastructure. Various development options arecurrently under review. • Eremor development - Initially discovered by Shell in 1978. Phase Iof 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. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AFR.L