Afren Completes Nigerian Farm-Out Deal

Afren has completed a farm-out agreement with Lekoil (subject to Nigerian Ministerial Consent), in respect of a 17.14% participating interest in the OPL 310 licence located offshore Nigeria.

Under the terms of the farm out, Afren will receive a total carry of up to US$50 million in respect of an exploration well currently being drilled at the Ogo prospect and a planned side-track well. The indigenous Nigerian company Optimum Petroleum Development Ltd. (“Optimum”), the named Operator on the block, will continue to hold a 60% participating interest, with Afren providing technical assistance to Optimum in respect of Optimum’s obligations under a Technical Assistance Agreement.

The Partners’ participating  interests are as follows, post the farm out to Lekoil: Optimum 60%; Afren 22.86%, Lekoil 17.14%
OPL 310 is located in the Upper Cretaceous fairway that runs along the West African Transform Margin and lies close to the Aje field, which has been declared commercial. Extending from the shallow water continental shelf to deep water, the block represents an exploration opportunity in an under-explored basin with a proven working hydrocarbon system in close proximity to the Tano Basin. Detailed evaluation of the block has identified several prospects lying in the same Turonian, Cenomanian and Albian sandstone intervals that have yielded significant discoveries in Ghana and Côte d’Ivoire. In its most recent independent assessment NSAI evaluated gross P50 unrisked prospective resources on OPL 310 at 476 mmboe.

The first exploration well to be drilled by the Partners is on the Ogo prospect, which is a four-way dip-closed structure in the Turonian to Albian sandstone reservoirs, targeting 78 mmboe of gross P50 prospective resources. Exploration drilling, using the GSF Transocean Monitor rig, commenced on 23 April 2013 and is currently drilling at a depth of 3,500 ft. The drilling programme is expected to last 90 days and will include a planned side-track, which will test a new play of stratigraphically trapped sediments that pinch-out onto the basement high targeting 124 mmboe of gross P50 prospective resources.
Osman Shahenshah, Chief Executive of Afren, commented: “We are delighted to have successfully concluded a farm-out on OPL 310, offshore Nigeria and welcome Lekoil as a Partner in exploring the significant potential of this under-explored region of the West African Transform Margin.”

Press Release, May 14, 2013

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