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Afren Signs Farm-in Agreement With Oriental Energy For Ebok
Field
04-02-2008
Afren plc announces that it has
entered into a farm-in agreement with Oriental Energy Resources Limited
(“Oriental”) for the development of the Ebok Field, located offshore South East
Nigeria.
Afren has entered into its sixth local partnership in Nigeria, with Oriental, to
jointly develop the Ebok field (“Ebok”). Oriental was awarded a 100 per cent.
interest and operatorship of Ebok in May 2007 by the ExxonMobil / Nigerian
National Petroleum Corporation (“NNPC”) Joint Venture. The farm-out has been
structured such that the field benefits from the Nigerian Marginal Field Fiscal
and Tax Regime. In addition, Afren has negotiated a collaborative agreement with
Oriental on other potential development assets in the region.
Ebok is an undeveloped oil field located in OML 67, 50 km offshore in 135 ft of
water in Nigeria's prolific south eastern producing area. The field was
discovered by the ExxonMobil / NNPC JV in 1968 (M-QQ1 (Ebok-1)), and two
subsequent appraisal wells were drilled in 1970 (Ebok-2 and Ebok-3). A total of
271 ft. (83m) of net oil pay was encountered in Ebok-1 in four sands between
2,600 ft. (800m) and 3,600 ft. (1,100m); none of the zones were production
tested. 24 degree API oil was recovered from Ebok-1.
• Afren estimates that the field contains Stock Tank Oil Initially In Place (“STOIIP”)
of 77 - 167 million barrels (mmbbls) (P90 - P10) in the two fault blocks tested
by Ebok-1 and Ebok-2 with a mean of 118 mmbbls.
• Recoverable reserves in excess of 25 mmbbls based on analogous 20 – 45%
recovery factors.
• Additional low risk appraisal potential is recognised in the adjacent
undrilled Ebok West fault block which is estimated to have mean STOIIP of 63
mmbbls.
• Additional exploration potential is recognised in the Ebok North prospect with
estimated mean STOIIP of 30 - 50 mmbbls and also in the deeper Qua Ibo sands.
• The Ebok area is covered with good quality 1992 3D seismic data and an
extensive data set is available for the three drilled wells.
• Ebok is located close to several producing ExxonMobil / NNPC JV fields and 55
km south-east of ExxonMobil’s onshore QIT Terminal.
The appraisal and development drilling programme will follow a similar fast
track schedule to Afren’s Okoro Setu Project:
• Appraisal drilling is scheduled for Q4 2008 with the objectives to acquire
high quality oil samples, establish well deliverability, and acquire the
reservoir data required for optimising the development plan; and
• Following a successful initial appraisal drilling outcome; submission of a
Field Development Plan is anticipated for 2009 and first commercial oil
production from Ebok could commence as early as Q1 2010.
The Farm-In Agreement signed between Afren and Oriental defines the commercial
terms under which Afren will participate with Oriental in the development of
Ebok, and is subject to requisite Government and Farmor approvals. Under this
agreement, Afren will pay a farm-in fee payable in cash and / or Afren shares,
which can be satisfied by existing resources. In addition, Afren will be
responsible for funding all capital and operating costs for the development of
the field, and will recover the costs from 100 per cent. of net field revenues.
Following cost recovery, the ExxonMobil JV will receive a Net Profit Interest,
with Afren and Oriental sharing in net production revenues equally.
Osman Shahenshah, Chief Executive of Afren,
commented:
“We are delighted to have entered into an agreement with Oriental Energy, which
was awarded the Ebok field by the ExxonMobil / Nigerian National Petroleum
Corporation JV. Ebok is a material proved undeveloped opportunity, with the
potential to add significant reserves and production to Afren’s portfolio. As we
look beyond First Oil, we are delighted to have established this unique
collaboration with Oriental to further grow our portfolio from Ebok and the
development of other potential assets from the Majors in Nigeria.”
Alhaji Mohammed Indimi, Chairman of Oriental,
commented:
“We are very pleased to have formalised our relationship with the founders of
Afren. The partnership with Afren is highly complementary and we look forward to
jointly developing the Ebok field. In addition, we see tremendous future
opportunities in relation to our collaborative agreement with Afren, to jointly
develop further farm-out opportunities in this prolific area, where a large
number of undeveloped discovered oil fields similar to Ebok are good candidates
for future development.”
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