Afren, the Africa-focused oil and gas explorer, has announced a new joint venture in Nigeria with Oriental Energy Resources Limited ("Oriental") and Energy Equity Resources ("EER") for participation in the exploration, appraisal and development of the OML 115 block. The block is in offshore South East Nigeria and adjoins the Ebok and Okwok development area.
Following the farm-in to develop the nearby Ebok Field with Oriental in March 2008, Afren entered into a collaborative agreement with Oriental to pursue other assets in the region. Afren subsequently farmed-in to the Okwok field in August 2009 and OML 115 represents another milestone.
Under the Farm-in agreement, Afren will acquire 81.25% of EER's 40% interest in OML 115 (32.5%). The total upfront cash cost will be US$6 million, in addition to the requirement to drill one firm exploration well at an estimated cost of US$30 million. Drilling is to commence with one exploration well scheduled for H2 2010.
Afren is looking to apply its enhanced understanding of the regional geology, having identified significant exploration potential at the deeper Qua Iboe level, a regionally prolific reservoir productive at the nearby Zafiro field. It estimates the gross mean resources potential at 270 mmbbls.
The CEO of Afren, Osman Shahenshah, said,
"We are delighted to have further extended our collaboration with Oriental to include OML 115, and at the same time enter into a Joint Venture partnership with EER. OML 115 represents an attractive exploration opportunity at minimal up front cost, adjacent to the Ebok and Okwok fields, where we have enjoyed considerable appraisal success. The close proximity of OML 115 to the Ebok - Okwok complex will provide a pre-existing export solution for any development on the block."