Afren

OPL 907 and OPL 917

Background

The licences are located in the Anambra Basin, onshore Nigeria - the second most prospective basin in Nigeria - with estimated remaining gas resources in excess of 5 trillion cubic feet (“Tcf”) of gas. However, the basin remains largely unexplored with only 30 wells drilled to date leading to six discoveries. The two licences cover an area totalling over 3,500 square kilometres.

OPL 907

OPL 907 contains the Akukwa gas and condensate discovery, with estimated in place volumes of up to 400 billion cubic feet (“Bcf”). Four shallow coreholes were drilled by Shell prior to the Akukwa-1 (1955) and Akukwa-2 (1956) wells that were drilled by Shell/BP.  The Akukwa-1 well encountered gas and condensate in Cretaceous sandstones but was not fully evaluated. The Akukwa-2 appraisal well found approximately 500ft net gas pay in several horizons and produced dry gas on test.

OPL 917

OPL 917 contains the Igbariam gas and oil discovery, with estimated in place gas volumes up to 300 Bcf and oil in place up to 80 mmbbl. Two wells were previously drilled on the licence by Shell/BP. Igbariam-1 (1971) encountered gas and condensate with a reported 196ft net gas column and a 30ft condensate/oil column in Cretaceous sandstones; the well was not tested.  The subsequent Ajire-1 well (1972) was water wet. A number of prospects and leads have been identified south of the discovery well. 

Terms

In March 2008, Afren through a Joint Venture agreement with Global Energy Company Limited (“GEC”) has signed Production Sharing Contracts for OPLs 917 and 907. Under the terms of the agreement, Afren Global Energy Resources has taken a 41% interest in OPL 907 and a 42% interest in OPL 917, and will act as operator of both assets. The JV agreement between Afren and GEC defines the commercial terms under which Afren will participate with GEC in the exploration and development of the two licences.  Afren has a combined 50% interest in the JV, with GEC holding the remaining 50%. 

Operations Update

The near term work programme includes additional data gathering and analysis on the existing discoveries. Additional high resolution 2D seismic data will be acquired over the existing discoveries later in 2008, prior to appraisal drilling in 2009 on Akukwa in OPL 907 and Igbariam in OPL 917.  The seismic will also evaluate the identified exploration leads and prospects.