Afren

Tuesday, March 27, 2007

Afren Plc announced on March 27 its preliminary results for the year ended December 31, 2006. In brief:

The company recorded a loss of £8.5 million for 2006 as compared to £4.6 million in 2005. Administration expenses rose from £3.7 million to £6.8 million due to increased activity during the year. Net interest expense increased to £1.5 million.

Total capitalized intangible expenditure amounted to £44.9 million, of which £20.8 million is set to be transferred to tangible oil and gas assets once the Okoro Setu project’s field development plan is approved by the Nigerian government. In this respect, at the start of the year the company secured $200 million of a fully underwritten credit facility which will mainly be used to finance the Okoro Setu.

Operational highlights include the undertaking of a successful appraisal program on the Okoro Setu project which has significantly delineated the development and the drilling of two appraisal wells on the Okoro field, on time and on budget. An independent reserves report estimates 2P reserves at 32 million barrels. Also, the Obo-1 well on Block 1 of the Joint Development Zone (JDZ) of Nigeria and Sao Tome & Principe (STP) logged a cumulative total of at least 150 feet of net hydrocarbon pay.

Regarding operations in Nigeria, Afren signed with Amni in June 2006 an agreement to appraise and develop the Okoro and Setu oil discoveries located in OML 112 offshore the Niger Delta. Afren, as the Technical Service Provider, successfully drilled two appraisal wells, the Okoro-3 and the Okoro-3ST, between September and December 2006.

The field development plan for the initial development of the Okoro Setu field, which was recently submitted to Nigerian government, is expected to be approved by April 2007. Development drilling will commence in Q3 07 using Global Santa Fe’s Adriatic VI. Target for first oil is on schedule, with peak production expected to reach 15,000-20,000 bopd by early 2008.

In Congo, Afren completed its strategic entry into the country by acquiring a 14% stake in the La Noumbi permit, adjacent to the M’Boundi field. Seven prospects and leads have been identified. The Doungou prospect is planned to be drilled in Q3 07. Seismic processing is currently being carried out. An exploration well and six contingent wells on this prospect, are under consideration for drilling in 2007/08.

Afren secured a foothold in Angola by acquiring through a Heads of Agreement with Gulf Energy Resources a 5% stake in the onshore Cabinda Block B.

In Nigeria and STP, where Afren has a stake in JDZ, Chevron, the operator of Block 1, confirmed that it had discovered hydrocarbons in the Obo-1 well. The exploration well data is being analyzed in order to determine the future exploration program.

In Gabon, 3D seismic reprocessing is underway on the Iris and Themis Marin permits.  An exploration well on the Admiral prospect in Themis Marin is expected to be drilled in Q3 07. The company has received government approval to increase Afren’s stake in the Ibekelia study area from 10 to 20%.

Osman Shahenshah, chief executive of Afren, commented: “During 2006, Afren made significant progress in the growth of its West African portfolio and has demonstrated its ability as technical operator through the two-well appraisal program on the Okoro field in Nigeria.”

“2007 marks an important year for Afren, as the company enters the next phase of its growth, focusing on the development of the Okoro Setu project in Nigeria, while at the same time using its African relationships to continue to grow its diversified portfolio.  With a strengthened operational team, Afren is well placed and on track for 15,000 to 20,000 bopd of production by early 2008,” he added.

« GO BACK

You may also like

" alt="First LNG Realized at the Greater Tortue Ahmeyim Project">

First LNG Realized at the Greater Tortue Ahmeyim Project

" alt="United Energy Acquires Western Desert Producer APEX">

United Energy Acquires Western Desert Producer APEX

" alt="Baker Hughes Announces Major Gas Technology Orders for Venture Global LNG">

Baker Hughes Announces Major Gas Technology Orders for Venture Global LNG

" alt="ReconAfrica: Naingopo Results Demonstrate a Working Petroleum System">

ReconAfrica: Naingopo Results Demonstrate a Working Petroleum System

" alt="Tullow Highlights 2025 Operational Plans in Ghana">

Tullow Highlights 2025 Operational Plans in Ghana

" alt="TotalEnergies to Supply 1.5 TWh to STMicroelectronics in France Over 15 years">

TotalEnergies to Supply 1.5 TWh to STMicroelectronics in France Over 15 years

" alt="Rockhopper Reaches Final Settlement with United on Egypt’s Abu Sennan Concession">

Rockhopper Reaches Final Settlement with United on Egypt’s Abu Sennan Concession

" alt="Oil & Gas Crucial for African Growth: AEC Calls for Industry Support to Defend African Market">

Oil & Gas Crucial for African Growth: AEC Calls for Industry Support to Defend African Market