CapEx
The Corporation's capital expenditure budget for 2008 is $1,509 million, excluding new business acquisition considerations, farm-in fees and license signature fees.
Budgeted development capital expenditures amount to $1,175 million split 73% per cent to Nigeria, 23% to Gabon and the balance to the Kurdistan Region of Iraq. Development drilling is the largest item, accounting for $636 million or 54 per cent of the development budget.
Budgeted exploration and appraisal capital expenditures amount to $330 million including $175 million in Nigeria (excluding the deepwater license area) and Cameroon, $90 million in deepwater Nigeria and the JDZ, $42 million in Gabon and $23 million in the Kurdistan Region of Iraq. The Corporation plans to drill up to 15 exploration and appraisal wells in 2008. The Corporation is endeavouring to start exploration drilling on its deepwater license areas as soon as possible in 2008. The Corporation is actively seeking a drilling rig of opportunity to accelerate its deepwater drilling program and mitigate scenarios in which the Aban Abraham drilling rig, already contracted to start drilling in late 2008, may be delayed.
Production
Working interest gross oil production in 2008 is expected to average between 140 and 145 Mbbl/d, an increase of approximately 10 to 14 per cent over 2007.
Oil production from Nigeria is expected to show modest growth averaging between 106 and 111 Mbbl/d. The expected production from Nigeria includes further increases from OML123 plus flat production from OML124, partially offset by decline from OML126 which was originally anticipated in 2007 but has not been observed.
Oil production from Gabon is expected to average between 31 and 36 Mbbl/d. The expected production from Gabon consists of continued growth from the Corporation's onshore license areas while maintaining production levels from the offshore license area. Addax Petroleum expects that oil production from onshore Gabon will continue to be partially constrained by a third party operator through most of 2008, although the Corporation has commenced the extension of its export system which, once commissioned, will allow for further production increases by availing of spare capacity through the Shell-operated Rabi station.
Production guidance for 2008 does not include any oil production from the Kurdistan Region of Iraq, although the Corporation, together with its partners Genel Enerji and the Kurdistan Regional Government, is planning for the installation of an early production system for the Taq Taq field. The early production system is expected to commence as early as the second half of 2008 and would include oil production of approximately 10 Mbbl/d from Taq Taq (approximately 4 Mbbl/d working interest to Addax Petroleum).
