Afren Plc Signs a Contract to Lease FPSO Vessel For Offshore Nigeria Project

Afren Plc Signs a Contract to Lease FPSO Vessel For Offshore Nigeria Project

Afren Plc 04-18-2007

Afren plc and its partner, Amni International Petroleum Development (AMNI), on Tuesday announced the signing of a contract with Bumi Armada Berhad for a Floating Production Storage and Offloading vessel (FPSO). The Armada Perkasa FPSO will be leased to Afren's Okoro Setu Project offshore Nigeria over a fixed 5-year period. Securing the vessel is the final milestone in ensuring that Afren is positioned to commence production from Okoro Setu in early 2008.

The Armada Perkasa is owned and operated by Bumi Armada Berhad, a major FPSO marine operator that is part of the Usaha Tegas group, one of the largest investment groups in Malaysia. The vessel storage capacity is 360,000 barrels with a processing capacity of 27,000 barrels per day. The unit will process the total well fluids, producing stabilized crude for storage in the FPSO, with subsequent regular off-take by tanker.

Following the successful appraisal drilling program, completed in December 2006, Afren has put in place the drilling capability, financing structure, development plan and now the production capacity for the Okoro Setu Project, in order to achieve its production target of 15,000 – 20,000 barrels per day in early 2008:

--Fully underwritten US$200 million debt facility
--Government approval for the Field Development Plan
--FPSO contract secured
--Development drilling scheduled to commence in Q3 2007 with the Global Santa Fe Adriatic VI drilling unit contracted for a nine month program

Osman Shahenshah, Chief Executive of Afren, commented:

"It is testament to the strength of Afren's management and technical team, and its close working relationship with AMNI, its indigenous partner, that in less than a year since agreeing its involvement in the project the Company is now fully prepared and well positioned to commence production from the Okoro Setu Project in early 2008.

"This announcement represents the final in a series of operational milestones Afren has set out to achieve in recent months. We now look forward to continued progress on our new ventures pipeline and starting development drilling in Q3 2007."