Keta Block

Background:

The acquisition of the Keta block (which is located offshore Eastern Ghana, positioned at the heart of the Volta River Basin) from Devon Energy Corporation was completed in June 2008. Afren has a 68% working interest and operatorship.  The Keta block covers an area of 5,500 km², in water depths ranging from 1,000m to 2,800m.

Previous exploration activity in the area was focused on the shallow water and onshore area, mainly targeting Tertiary plays, but failed to yield any discoveries.  The most attractive potential on the Keta Block lies within the sandstones of the Upper Cretaceous section.  This play type is very similar to that successfully proven by recent drilling at the Jubilee and Odum discoveries.  This success has confirmed Ghana's emergence as a major hydrocarbon province with world class prospectivity.

The Keta block is covered by 1,600 km² of good quality 3D seismic that has recently been reprocessed with a marked improvement in data quality. Further technical evaluation of the re-processed seismic data is ongoing, prior to drilling.

Operations Update:
Afren agreed a farm down transaction with Mitsui E&P Ghana Keta Limited, a subsidiary of Mitsui & Co, thereby successfully reducing its working interest in the Keta Block from 88% to 68%.

The Cuda-1x well, targeting an interpreted Campanian fan / channel complex, was spudded on 16 November 2008 using the Transocean Deepwater Discovery drillship.

The well intersected a zone of severe pressure in a section interpreted to be the top of the Upper Cretaceous.  As a consequence, the well had to be plugged and abandoned without testing the highly promising target intervals.  The rig was released on 25 December 2008.

Afren and its JV partners have elected to proceed with the next license phase with one commitment exploration well planned, most likely in 2011.