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Afren
Plc Releases its 2007 Preliminary Results
03-29-2008
Afren plc, the African
independent oil and gas exploration and production company, announces its
preliminary results for the year ended 31 December 2007.
Operational
Okoro Setu on-track for the Company's first organic oil production:
• Key milestones achieved in 2007 include the approval of the Field Development
Plan by the Government of Nigeria, reserves certified by Netherland Sewell &
Associates, Floating Production Storage and Offloading Vessel ('FPSO') upgrade
and completion of project long lead items
• The Adriatic VI drilling rig, which has been contracted for a nine-month
period, arrived on location on 22 January 2008 and development drilling has
commenced
• Targeted production of 15,000-20,000 bopd in 2008 from 5 development wells
• Eremor field is on-track for first oil in Q4 2008
• First exploration well (Doungou-1) completed on the La Noumbi licence in Congo
Brazzaville. The well was plugged and abandoned but proved a working hydrocarbon
system in the pre-salt section
• Testing operations on the Ofa-1 discovery well completed and decision taken
not to proceed further with the development
Corporate and acquisitions
Acquisition of Devon Energy's interests in Ghana,
Angola and Cote d'Ivoire (post period-end):
• Fully financed through debt, without shareholder equity dilution
• In Ghana, a 95% working interest and operatorship of the Keta Block. A well is
planned in Q4 2008 to test the Cuda prospect which is analogous to the Jubilee
and Odum discoveries to the west in Ghanaian waters
• In Angola, a 15% working interest in Block 16. Three exploration wells are
planned, commencing in Q3 2008 on prospects in deep water, analogous to the
discoveries in the adjacent Blocks
• In Cote d'Ivoire, a 47.96% working interest and operatorship of the producing
Block CI-11, a direct 65% interest and operatorship with rights over an
additional 15% interest in the undeveloped Block CI-01 and a 100% interest in
the onshore Lion Gas Plant ('LGP')
• Subject to customary approvals
• Continued progress on gas monetisation strategy, with a co-operation agreement
signed with E.ON Ruhrgas AG and African LNG Holdings Limited and Production
Sharing Contracts for OPL 907 and OPL 917 signed, within the gas rich Anambra
basin onshore Nigeria, post period-end
• Participation agreement signed with Excel Exploration & Production Limited for
the development of the Eremor field in Nigeria. The field contains oil reserves
of 2.9 mmbbl (1P) and 4.1 mmbbl (2P), according to an independent reserves audit
by Netherland Sewell & Associates
Financial
• $230 million borrowing base rolling facility secured to finance the Okoro Setu
Project
• Completion of $80 million (before expenses) total equity fund raisings
• Closed $50 million unsecured loan acquisition facility in Nigeria
• Cash balance as at 31 December 2007 of $91.8 million (2006: $35.7 million)
• Net loss of $39.0 million (2006: $15.8 million) due to increased operational,
administrative and business development activities
Outlook
• Development drilling has commenced on Okoro Setu with expected production of
15,000-20,000 bopd in 2008
• Active drilling campaign, with up to 7 development and 5 exploration wells to
be drilled during 2008
• Completion of the acquisition in Cote d'Ivoire, with an effective date of 30
June 2007, expected in H1 2008, providing the Company with 3,000 entitlement
barrels of oil equivalent per day and increasing 2P reserves by 28 mmboe
• Production start-up on the Eremor field in Nigeria expected in Q4 2008
• Active pipeline of New Venture opportunities to further consolidate Afren's
position, particularly in West Africa
Osman Shahenshah, Chief Executive of Afren Plc,
commented:
"Afren has delivered tremendous operational and acquisition-led progress in
2007, putting the platform in place to deliver a transformational leap for the
Company in 2008. In less than 20 months from signing the agreement with our
indigenous partner to develop the Okoro Setu Project in Nigeria, we have
commenced development drilling and remain on-track for the company's first
organic production, targeting 15,000 to 20,000 barrels of oil per day in 2008.
We have expanded our indigenous partnerships to five in Nigeria and were
honoured to recently partner with the national oil company PETROCI in the
important strategic entry into Cote d'Ivoire.
Through our consistent and differentiated strategy, Afren today has a portfolio
of 15 assets in 7 countries, with an exciting outlook for 2008 through a
combination of development and high impact exploration drilling, near term
production growth and significant opportunities to further consolidate asset and
corporate opportunities in Africa."
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