OilVoice - Afren Provides Corporate and Operational Update

Afren Provides Corporate and Operational Update

04 November 2009

Afren plc announces its intended Admission to the Official List and also provides an Operational Update.

Admission to the Official List
Afren PLC gives notice of the intended cancellation of trading of its ordinary shares on the Alternative Investment Market (“AIM”) of the London Stock Exchange.

It is expected that the cancellation of the trading in its ordinary shares on AIM will take place at the same time as the ordinary shares are admitted to the Official List and to trading on the London Stock Exchange’s main market for listed securities, which is expected to occur in early December, subject to the receipt of the necessary approvals from the UK Listing Authority and the London Stock Exchange.

Afren has grown significantly since admission to AIM in 2005, and has assembled a portfolio of 16 assets across six African countries namely Nigeria, Côte d’Ivoire, Ghana, Congo Brazzaville, Gabon and Nigeria São Tomé and Príncipe Joint Development Zone. During this time Afren has established a stable production base in Nigeria from the Okoro development and in Côte d’Ivoire from Block CI-11.

Netherland, Sewell and Associates, Inc. (“NSAI”) has produced a Competent Persons Report on the Company’s reserves and resources, as a requirement for the prospectus to be published in connection with Admission to the Official List. NSAI has prepared its assessment of Afren’s asset base as at 30 June 2009 (except with regard to Ebok where the assessment is at 15 October 2009), and has reviewed and incorporated field studies and data that were available up to that date. NSAI has taken into account the FDP approval for the Ebok Phase 1a development in its assessment from this date. Studies that were either underway prior to and completed since 30 June 2009 or work and studies undertaken post 30 June 2009 have not been taken into account.

Operations update

Acquisition of an interest in OPL 310 offshore Nigeria
Awarded to indigenous company Optimum Petroleum in 1992, OPL 310 is located in the Benin Basin offshore western Nigeria. Afren has farmed-in to the block as technical operator and will hold a 40 per cent. legal interest and a 70 per cent. effective working interest. Located adjacent to the highly prospective Aje field (recently declared commercial), OPL 310 represents a high impact shallow to deep water exploration opportunity in the under explored western Nigeria offshore area. The existing seismic database covering the area has been acquired, and work has commenced to further assess the prospectivity of the block and define a forward work programme. There are several prospects already identified in the Cenonian, Turonian and Albian sandstone reservoirs, with trapping configurations typically 4-way dip closures over basement highs.

Of particular interest to Afren is the hydrocarbon potential that exists within the Upper Cretaceous (Cenonian and Turonian) horizons, which correspond to the proven hydrocarbon bearing zones at the Company’s Blocks CI-11 and CI-01 in Côte d’Ivoire and also to equivalent intervals of primary prospectivity at the Company’s Keta Block in Ghana. Afren has attributed mean unrisked resources of 330 million barrels to the block.

Through application of current understanding of the Cretaceous depositional model at OPL 310, Block CI-01 and the Keta Block, Afren has assembled an attractive, high impact exploration inventory in one of Africa’s most prolific emerging oil and gas plays.

Ebok-5 appraisal well drilling update
As announced on 3 November 2009, Ebok-5, currently being drilled by the Transocean Adriatic IX jack up drilling unit has encountered a total oil column of 266 ft in the D1 and LD-1E reservoir sands ranging in measured depth from 2,341 ft to 3,090 ft. The Ebok-5 appraisal well is currently drilling below 3,350 ft and will continue to test deeper objectives.

Afren’s pre-drill volumetric estimates for the Ebok West Fault Block were 92 mmbbls STOIIP with 2P recoverable volumes of 25 mmbbls. The Ebok-5 well results to date validate Afren’s amplitude based model of the Ebok field.

Development of the broader Ebok - Okwok complex
On 3 November 2009, the Board of Afren announced that the FDP for the Phase 1a development of the Ebok Field has been approved by the Department of Petroleum Resources in Nigeria. According to the FDP, development drilling will commence once the Ebok-5 (drilling ahead) and Ebok-6 appraisal wells have been completed. The Phase 1a development plan comprises five horizontal oil production wells in the D2 reservoir, one horizontal oil production well targeting the D1 reservoir and one water injection well in the central Fault Block 1 and Fault Block 2 areas of the field. All wells will be drilled from a single field location via a Well-head Support Structure (“WSS”) and mobile offshore production unit (“MOPU”). Afren will then drill three horizontal production wells and one water injector targeting the D2 Southern Lobe.

Following completion of the initial development phases, it is planned that the second phase development will be launched, incorporating the full development of the D1 reservoir (Fault Block 1 & 2 areas) and Fault Block West, whilst appraising the potential within the West Flank Qua Iboe structure (150 mmbbls STOIIP, estimated 45 MMbbls recoverable resources) and Fault Block North (30 MMbbls STOIIP, estimated 9 mmbbls recoverable resources).

The recent acquisition of the adjacent Okwok Field, significantly enhances Afren’s assessment of the resource potential of the greater Ebok - Okwok petroleum complex. Afren currently plans to drill one appraisal well at Okwok in mid 2010, and is engaged in studies to determine the optimal well location and development concept, maximising on development synergies with Ebok.

Review all our latest West Africa news and company profiles