Joined: 10 Feb 2007
|Posted: Mon Feb 12, 2007 4:43 pm Post subject: Operations
|Operations - Nigeria, OML 112
OML 112 contains the Okoro and Setu Fields, two proved undeveloped oil and gas fields which were originally awarded to Amni International Petroleum Development Company Limited ("Amni") in 1993 as part of the Nigerian government's indigenous licensing program.
Afren signed a Financing and Production Sharing and Technical Services Agreement with Amni for participation in the development of the Okoro Field ("Okoro") and Setu Field ("Setu"), offshore Nigeria.
Under the terms of the Financing and Production Sharing Agreement with Amni, Afren is responsible for all costs incurred in the development of the field and recovers these costs from 90% of production with an 11% uplift on capital. Pre and post cost recovery, Afren receives 50% of profit oil. Afren's Effective Interest is therefore >60%. The fiscal regime is a flat Petroleum Profits Tax of 60% and a sliding scale Royalty from 2.5% to 18.5%.
The fields have combined estimated recoverable reserves of 30 mmbbls and are expected to flow in excess of 15,000 barrels of oil per day ("bopd") when full combined production is achieved.
An appraisal well was spudded on 14 October 2006 by the Seadrill 7 jack-up rig on the Okoro Field. The well is being drilled 1.5km east of the Okoro-1 discovery well, which penetrated two oil bearing sands between 4,900 and 5,500 feet. Drilling is expected to take 30 to 45 days.
Following completion of testing operations, a second appraisal well will be drilled on the Okoro Field. The well will be drilled as a deviated sidetrack from the Okoro-3 wellbore and is designed to further evaluate both reservoirs and provide greater control for planning future horizontal production wells. The sidetrack programme is expected to take approximately 15 days.
Perspective view of Okoro pay sands
Nigeria OML 112
Two wells were drilled on Okoro in the 1970s. The first well discovered oil in two sands and the follow-up appraisal well confirmed the presence of both reservoir sands. The field is covered by good quality 3D seismic data which was acquired by the Mobil Corporation.
Amni drilled the Setu discovery well in 2002 which discovered oil in five separate reservoir sands. All the zones were tested and flowed at a cumulative rate of 12,000 bopd. The field is covered by good quality 3D seismic data which was acquired by Shell in the 1990's.
Operations - Nigeria, OML 90
Afren signed a Financing and Production Sharing Agreement with Bicta Energy & Management Systems Limited ("Bicta") - an indigenous Nigerial Oil Company - in August 2005 for the development of the Ogedeh Field in OML 90. The Ogedeh Field is a proven undeveloped discovery located in the shallow water western part of the prolific Niger Delta region. Contingent resources are contained in two separate horizons and estimated to contain a combined total of between 5 - 15 mmbbls.
Under the terms of the Financing and Production Sharing Agreement with Bicta, Afren is responsible for all costs incurred in the development of the field and recovers these costs from 82.5% of production with a 20% uplift on capital. Pre and post cost recovery, Afren receives 50% of profit oil. Afren's Effective Interest is therefore >75%. The fiscal regime is a flat Petroleum Profits Tax of 55% and a sliding scale Royalty from 2.5% to 18.5%.
Discussions are currently ongoing with other interested parties in OML 90 about securing a rig for a potential joint development in the area.
Ogedeh is located offshore in 40ft of water, approximately 12kms from nearby production infrastructure which is linked directly to the oil export terminal at Forcados. The field is a conventional Niger delta structure, with oil and gas at shallow levels, and is likely to be a low cost development.
The Ogedeh field was discovered by Chevron in 1993 by the Ogedeh-1 well, which logged oil and gas in a number of zones. The discovery well was not tested but a nearby well flowed over 4,000 barrels oil per day of 49º API oil from two zones at levels similar to those in Ogedeh. Ogedeh is fully covered by 3D seismic.
Operations - Nigeria, São Tomé & Príncipe
Joint Development Zone ("JDZ") - Block 1
Afren has agreed terms for a participation in an effective 4.41% stake in JDZ Block 1, which covers an area of approximately 700 square kilometres situated in the Gulf of Guinea, offshore equatorial West Africa. Block 1 is adjacent to deepwater discoveries in Nigerian waters where more than 12 billion barrels of recoverable oil have been discovered since 1996, reflecting an exploration success rate of greater than 50 percent. The nearest existing wells to Block 1 are Akpo and Egina, situated less than 20 kilometres north of Block 1, in Nigeria OPL 246.
The JDZ, covering a total area of approximately 34,500 square kilometers, was established in February 2001 upon the ratification of a formal bilateral treaty resolving overlapping maritime boundary claims of the two host nations, Nigeria and the island nation São Tomé & Príncipe, in the Gulf of Guinea. The treaty allocated 60% of the resources in the JDZ to Nigeria and 40% to São Tomé & Príncipe. The treaty is to last for 45 years, with a provision for review after 30 years. The affairs of the JDZ are administered by a Joint Development Authority ("JDA"), officially inaugurated in January 2002, reporting to a Joint Ministerial Council.
A total of 9 blocks in the northern sector of the JDZ have been designated for licensing, covering a total area of roughly 8,500 square kilometres, at water depths of 1,500 to 2,500 meters.
JDZ Block-1 is located approximately 190 miles (300 kilometers) north of the city of São Tomé and approximately 125 miles (200 kilometers) from the city of Port Harcourt in Nigeria. Block 1 was awarded in April 2004 to a consortium of ChevronTexaco JDZ Limited (51% and Operator); Esso Exploration and Production Nigeria - São Tomé "One" Limited (40%) and Dangote Energy Equity Resources Limited ("DEER") (9%). The Consortium members paid a signature bonus of US$123 million for the right to develop Block 1 under a long-term Production Sharing Agreement, which was signed on 1 February 2005, and became effective on 22 March 2005.
Afren holds a 4.41 per cent. indirect net working interest in the JDZ's Block 1 through a 49 per cent. equity interest in DEER, which was acquired on 29 March 2005. The potential of the area lies in the extension of the proven and prolific deep water plays discovered to the north and west in Nigeria. The nearest of these is the Akpo and surrounding complex which is reported to contain in excess of 1 billion boe and is currently being developed.
Chevron, the Operator of Block 1 commenced drilling of the first exploration well on this license on 14 January 2006. The Obo-1 well is located in approximately 1,750m of water (5,750 ft) and is being drilled by the Deepwater Discovery Drillship, which is contracted to Chevron by Transocean. Initial drilling of the well has been completed and the results are currently being evaluated.
Operations - Congo, La Noumbi
Afren announced on 22 November that it has completed the acquisition of Heritage Congo Limited, providing the Company a 14% share of the highly prospective La Noumbi permit.
The La Noumbi permit covers 2,565 km² and lies adjacent to - and on trend with - the world class M'Boundi field. The acreage is under explored and no drilling has taken place since 1992. The acreage contains one ready to drill prospect, Doungou (50-75 mmbbls), which is planned to be drilled early in 2007. The permit also includes an existing discovery; the Tie-Tie well which was discovered in 1982 and flowed 1,689 bopd.
The operator is Maurel et Prom (48.5%) and Burren (37.5%) is a partner.
This represents Afren's first targeted acquisition within the Vandji Sand Fairway that extents north into Gabon and south into Angola.
A new 500km 2D seismic programme is currently underway, targeted at existing leads and prospects, expected to result in additional exploration drilling in early 2007. Six wells are currently under consideration for drilling in 2007. Under the terms of the Production Sharing Contract, three firm and three contingent wells are required.
According to the Production Sharing Contract, the Royalty is fixed at 15% with a 1% Education Tax, revenue available for cost recovery is 60% (for cumulative production below 100mmbbls gross) and 55% (for cumulative production more than 100mmbbls gross). Contractor profit oil entitlement is set at 45%.
Operations - Gabon
Operations - Gabon
Gabon Regional Map
Iris Marin and Themis Marin Concessions and Technical Evaluation Agreement over the Ibekelia License area.
Afren has acquired two wholly-owned subsidiaries, Gabon Investments (Iris Marin) Pty Ltd and Gabon Investments (Themis Marin) Pty Ltd. These companies hold a 12.86% Participating Interest in the Iris Marin and in the Themis Marin Exploration and Production Sharing Contracts ("EPSC") respectively. The Themis and Iris concessions both lie in shallow water offshore Gabon, they are surrounded by proven oilfields and they are close to pipelines and production infrastructure. Each of these blocks has significant potential and fits in with Afren's strategy of acquiring exploration licences with low-cost exploration upside in the Gulf of Guinea region, close to existing facilities.
The Themis and Iris blocks are both operated by Sterling Energy plc. The Iris Marin concession covers 902 square kilometres and is situated along the Gabon coast adjacent to the Shell operated Gamba field. The Themis Marin concession covers 607 square kilometres and borders the northern edge of the Etame Marin permit.
The principal target in both the Iris and Themis blocks is the Gamba Sandstone reservoir, which is productive in the nearby Etame field. The two blocks span the shoreline to a water depth of 80 metres and they are adjacent to the Gamba and Ivinga producing oil fields and the Olowi oil development.
Afren's co-venturers in the Iris Marin and Themis Marin EPSCs include Pan-Ocean Energy Corporation Limited (25.71%), Petroleum Oil & Gas Corporation Pty Limited of South Africa (22.86%), Sterling Energy plc (20.57%) and Premier Oil plc (18.00%). The Government of Gabon has an option to back in for 7.5% in both permits.
The Iris Marin EPSC was signed in November 1999 and comprises three exploration terms, each of approximately three years duration.
The Iris Iboga Marin-1 well was drilled in the Iris Marin licence in August 2005 and reached a total depth of 2,035m. The main target sandstone was encountered with excellent reservoir properties which were water bearing. Further 3D seismic re-processing is ongoing to identify further drillable prospects on the permit. This work is expected to be completed by end 2006 when a decision on further drilling on Iris Marin can be taken.
The Themis Marin EPSC was also signed in November 1999 and comprises two exploration terms of approximately three years each. The co-venturers have acquired 1,541 km of 2D seismic and 296 km² of 3D seismic and are currently processing a recently acquired 216 km² 3D seismic survey in the southern portion of the permit.
3D seismic was acquired in the southern part of the Themis Marin permit in 2005 and is currently being processed, following which the remaining firm commitment well will be drilled. This is expected to take place later in 2006 / early 2007, subject to rig availability. The primary target is expected to be in the sub-salt Gamba sandstone play which has been proven as a reservoir in the adjacent acreage.
Afren has a 10 per cent. interest in the Ibekelia Technical Evaluation Agreement ("TEA") area, which is adjacent to the Gamba and Olowi oilfields. The group, operated by Sterling Energy, has agreed an exclusive 12 month TEA, exerciseable upon receipt of the data from the Government, which is expected shortly. The area may then be converted to an exploration permit, subject to approval by the Government.
Operations - Angola