Akepo Field

8 Dec 2005 07:02

Afren PLC08 December 2005 Afren plc Afren signs second deal in OML 90 Cluster offshore Nigeria, for participation in the development of the Akepo Field Afren PLC ("Afren"), an independent oil and gas company focused on establishingitself as the leading pan-African exploration and production company, announcesit has signed an agreement to farm in to the Akepo field, offshore Nigeria. The Board of Afren announces that it has signed a Memorandum of Understandingwith Sogenal, an indigenous Nigerian oil and gas company, to participate in thedevelopment of the Akepo field in OML 90, offshore Nigeria. Akepo is a provenundeveloped oilfield located in the shallow water offshore Niger Delta. TheAkepo field was discovered by Chevron's Akepo No 1 well in 1993, logging 107feet of net oil pay, and is expected to contain approximately 10 - 20 millionbarrels of prospective recoverable oil resources. The discovery well wassidetracked and confirmed over 150 foot of net oil pay at a number of separatelevels. Sogenal was awarded 100% of the Akepo Field by the Government of Nigeriain the 2003 marginal field licencing round. The Akepo Field is Afren's second partnership agreement signed this year as partof its strategy to participate in the development of clusters of provenundeveloped fields, with low cost development options. On 15 August 2005 Afrenannounced it had signed a Financing and Production Sharing Agreement with BictaEnergy and Management Systems Ltd to jointly develop the Ogedeh Field, also inOML 90. Both the Ogedeh and the Akepo field are fully covered by 3D seismic. The Akepo Field is directly adjacent to the Ogedeh Field, allowing Afren andpartners to benefit from economies of scale in the development of both fields.Afren expects development drilling to commence on both Akepo and Ogedeh in Q22006, and is in advanced discussions with a number of rig contractors to thisend. The two fields are located approximately 12 kms from nearby productioninfrastructure linked directly to the oil export terminal at Forcados. Thefields are expected to produce at a combined initial rate in excess of 10,000barrels per day on full field development. The memorandum of understanding signed between Afren and Sogenal defines thecommercial terms under which Afren will participate with Sogenal in thedevelopment of Akepo. Under the terms of this agreement, Afren will beresponsible for paying all costs for the development of the field, and will beable to recover those costs via an allocation of oil and gas produced from thefield. After all costs have been recovered, Afren and Sogenal will share in theproduction in accordance with their working interests. Brian O'Cathain, Chief Executive of Afren commented: "We are pleased to have reached agreement with our new partners Sogenal toparticipate in the Akepo Field. With two marginal fields within our portfolio weare well placed to generate first oil in the first half of 2007. We will nowmove on rapidly with Bicta and Sogenal to appraise and develop the Akepo andOgedeh fields in a cost effective manner. This transaction is in line with our stated strategy of leveraging off strategicrelationships to gain access to attractive deal flow in areas such as the Nigerdelta region. Akepo is one of a number of deals we are evaluating which willfurther develop Afren as a leading African exploration and production company". 8th December 2005 Enquiries: AfrenBrian O'Cathain +44 20 7182 1800Osman Shahenshah +44 20 7182 1800 Pelham Public RelationsJames Henderson james.henderson@pelhampr.com +44 020 7743 6673Alisdair Haythornthwaite alisdair.haythornthwaite@pelhampr.com +44 020 7743 6676 Afren is an independent oil and gas exploration, development and productioncompany, established in 2004 to build an attractive, diversified and balancedportfolio of African assets, with an initial focus on the Gulf of Guinea region.Afren's corporate objective is "Capital appreciation for shareholders throughpreferential access to oil and gas production and exploration acreageacquisition, production growth, deal flow and exploration drilling in Africa" Notes to Editors: The Akepo Field is one of 24 proven oil and gas fields which were awarded inDecember 2003 to indigenous companies under the Nigerian Government's MarginalField Allocation programme. This programme forms part of the Government'sefforts to encourage the development of the indigenous oil and gas industry inNigeria. A map showing the location of the Akepo field can be found on Afren'swebsite at www.afren.com This information is provided by RNS The company news service from the London Stock Exchange