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Afren Acquires Heritage Oil's Interests in the Republic of Congo
Afren PLC 6/7/2006
 

Afren PLC has entered into an agreement with Heritage Oil to acquire the entire issued share capital of Heritage Congo Limited, which holds Heritage's interests in the Republic of Congo (Brazzaville).

ACQUISITION HIGHLIGHTS

• Heritage's Congo interests:
  -25% interest in the Kouakouala A production permit
  -14% interest in the La Noumbi exploration license
  -30% interest in the Mengo field on the Kouakouala B development permit.
• All licenses are located close to the M'Boundi Field (1.4 billion barrels of oil originally in place), one of the largest onshore fields in Africa, which currently produces over 65,000 bopd.
• The cash consideration for the acquisition is US$28 million together with 2,000,000 warrants in Afren.

IMPACT ON AFREN

• Immediate production (25% interest of 1,093 bopd gross Kouakouala field production)
• High impact exploration potential on the La Noumbi license with 2,830 sq km of under-explored acreage (Afren: 14%)
• Share of potential of the Mengo Field which has 2 billion barrels of oil in place (Afren: 30%)
• Strategic entry into Congo
• Continuation of pan-African diversification strategy

AFREN POST ACQUISITION

• Diversified portfolio of 10 assets in the Joint Development Zone of Nigeria Sao Tome and Principe, Nigeria, Gabon and Congo
• Production: Kouakouala in Congo
• Near term development: 15,000 to 20,000 barrels of oil per day by 2008 from Ogedeh, Okoro and Setu Fields in Nigeria
• High impact exploration: La Noumbi in Congo and Block 1 of the Joint Development Zone of Nigeria Sao Tome and Principe
• Low cost exploration: Iris Marin, Themis Marin and Ibekelia in Gabon

Brian O'Cathain, Chief Executive of Afren, commented:

"This acquisition is very exciting for Afren, providing a strategic entry into Congo and further diversification of Afren's West African portfolio. The acquisition delivers immediate production and cash flow together with high impact exploration in one of Africa's most prolific on-shore basins. The La Noumbi license is adjacent to and on trend with the M'Boundi field, one of the largest onshore oilfields in Africa. Afren is delighted to be in Congo, and looks forward to working closely with the national oil company SNPC and the Congolese authorities to develop other opportunities in Congo.

This complements the recent announcement of a significant agreement with Amni in Nigeria for the development of two proved undeveloped fields of 30 to 60 million barrels and follows the announced Obo-1 discovery on Block 1 of the Joint Development Zone. Since the IPO in March 2005, Afren has expanded its West African presence to the Joint Development Zone of Nigeria Sao Tome and Principe, Nigeria, Gabon and Congo, growing its portfolio to ten assets with a combination of production, near term development and high impact exploration opportunities".