Afren

Okoro Setu Fields (OML 112)

Background

The Okoro Field (“Okoro”) and Setu Field (“Setu”) are undeveloped fields located in OML 112 in shallow water offshore Nigeria, which were originally awarded to Amni - a well established indigenous oil company - in 1993 as part of the Nigerian government's indigenous licensing programme.  The fields have combined 2P reserves of 42 million barrels (management case) and 2P Independent Certified reserves of 32 million barrels (NSAI). 

Okoro Field

The Okoro Field (“Okoro”) was discovered in 1973 by Japan Petroleum with the Okoro-1 well. The well encountered oil in two zones in the Agbada Formation and was logged and tested. The Okoro-2 well was drilled in 1974 at the eastern extension of the field and was water wet. The field is covered by good quality 3D seismic data which was acquired by Mobil Corporation.

ppt of a perspective view of the Okoro pay sands

Setu Field

The Setu Field (“Setu”) is located 7 km North of Okoro and was discovered by AMNI in 2002 with the Setu East-1 well. Five oil bearing zones were encountered in the Agbada Formation and all were successfully tested at individual rates above 1,900 bopd. A second well, Setu East-2, was drilled to the west and was water wet.

Terms

In June 2006, Afren signed a Financing and Production Sharing and Technical Services Agreement with Amni for participation in the development of Okoro and Setu. Under the terms of the agreement, Afren will finance the development programme. On production, Afren will recover these costs with an uplift on its capital, from over 90 per cent of the barrels produced, net of operating costs and royalties. Following cost recovery, Afren and AMNI will share the production.

Operations update

In June 2006, Afren announced the agreement signed with AMNI, a well established indigenous oil & gas company, for participation in the development of the Okoro Setu Project.

During 2007 the partners received approval of the Field Development Plan and secured a Floating Production Storage and Offtake Vessel (“FPSO”).

In Q1 2008, development drilling commenced from a subsea template using Transocean's Adriatic-6 jack-up rig. The 10-point fixed mooring system for the FPSO vessel was installed in January and the Armada Perkasa arrived in March 2008 and was hooked up to the anchor system.

In May 2008, the wellhead platform was installed and flowline connections are progressing.

Initial production from the first of two wells drilled to date has commenced at a rate in excess of 3,000 barrels of oil per day (bopd) of 27 degrees API gravity oil, which is in line with expectations.

The remaining wells will be batch drilled and the Company is on track to achieve full production of 15,000 bopd in 2008.