AFR.L Regulatory News (AFR)

11 Aug 2009 07:00

Afren plc (AFR LN)

Afren plc secures drilling rig for Ebok development

London, Tuesday August 11, 2009. Afren plc and its partner Oriental Energy Resources Limited ("Oriental") are pleased to announce the signing of a drilling contract for the Transocean Adriatic IX jack-up drilling rig for the Ebok Field oil development offshore South East Nigeria.

Afren and its partner, Oriental, announce that a rig contract has been signed with Transocean, commencing in September 2009. The Adriatic IX jack up drilling rig has been secured at a rate of US$97,000 per day for the first 250 days of operations, with a rate of US$85,000 per day there-after, based on a 425 day extension.

The Adriatic IX rig will be used to carry out an extensive drilling campaign at the Ebok Field located in OML 67, offshore Nigeria. Pending Government approval of the formal Field Development Plan, Ebok Field development will commence with the drilling of six horizontal production wells and one vertical water injection well. Two appraisal wells to test the additional upside potential within the Ebok West Fault Block and D2 Southern Lobe of the Field will also be drilled.

The Ebok Field Development Plan ("FDP") has been submitted to the Nigerian Department of Petroleum Resources ("DPR"), and contract negotiations are at an advanced stage for field production facilities and requisite infrastructure. A full and comprehensive outline of the Ebok field and FDP was made at the recent Ebok Capital Markets day hosted by Afren on 30th June 2009. The presentation materials from the Capital Markets Day are available for viewing and download at www.afren.com .

Project background and key highlights

Originally discovered in 1968, the Ebok-1 well encountered four oil bearing sands, which significantly de-risked the project at the outset.

Appraisal drilling by the Afren/Oriental partnership in Q4 2008 proved 2P reserves of 53 mmbbl in the Fault Block 1 & 2 areas of the field (in excess of pre-drill minimum economic field size of 20 mmbbls).

Upside potential of an additional 99 mmbbls identified (includes 45 mmbbls in Qua Iboe sands).

Total un-risked resource potential of 152 mmbbls.

Osman Shahenshah, Chief Executive of Afren, commented:

"We are pleased to have secured a drilling unit at a very competitive rate, and to have extended our working relationship with Transocean, who provided the Trident IV drilling rig for the Ebok-4 appraisal well and also the Adriatic VI drilling rig for the successful seven well development drilling campaign at the Okoro development. The signing of this contract is an important milestone for the Ebok project, which remains on track to achieve a target of 15,000 bopd in early 2010, increasing to 35,000 bopd by the end of 2010." 

Alhaji Mohammed Indimi, Chairman of Oriental, commented:

"We are delighted with the finalisation of the rig contract that will see development drilling commence at the Ebok Field in September 2009. Oriental has worked diligently with our partner Afren to rapidly progress to First Oil at Ebok since successfully production testing the Ebok-4 Appraisal well in January of this year. Oriental looks forward to delivering one of the largest independent oil developments in Nigeria to date as a major milestone in the Nation's Indigenous Program."

Background information

Afren plc

Afren plc (www.afren.com) was founded in 2004 with the vision to become the premier pan-African independent exploration and production Company, through a differentiated strategy based on a strong African representation in the Board and management, partnering with indigenous companies, partnering with National Oil Companies and Governments as well as finding a solution to the vast untapped gas reserves in the Gulf of Guinea. Since the Company's listing on the AIM market in 2005, Afren has rapidly expanded its portfolio to 16 assets across 6 African countries with over 26,000 boepd net WI production and a material reserves base of 86 mmboe.

Note

In accordance with the AIM Rules, the technical information in this release has been reviewed and signed off by Mr Iain Wright, who is Technical Director at Afren Plc and has over 25 years relevant experience within the sector. He consents to the information in the form and context in which it appears. The Company estimates its reserves in accordance with the guidelines and definitions of the 2007 SPE/WPC/AAPG/SPEE Petroleum Resource Management System ("PRMS") Classification System.