Nigeria: Afren Commences Development Drilling on Okoro East Field

Afren plc announces that development drilling has commenced on the Okoro East field, following the discovery in January 2012. In addition, a side-track of the existing Okoro-5 well has encountered additional oil volumes in a previously un-swept area of the reservoir within the Okoro main field, offshore south east Nigeria.

Following the successful Okoro East well (Okoro-13) and subsequent well-test results in the first quarter of 2012, Afren and partner Amni International Petroleum Development Ltd. (“Amni”) have commenced early development drilling at the field. The Okoro-14 development well is being drilled from the existing Okoro main field Wellhead Platform (“WHP”) with the intention of establishing initial production from Okoro East, located approximately 2km east of the Okoro main field, via the existing Okoro Floating Production Storage Offloading vessel (“FPSO”). The Okoro-14 well is targeting a Tertiary aged reservoir within a new play that has been established in a deeper buried horst block structure. Oil quality at Okoro East is 38° to 40° API, and Pmean STOIIP 157 mmbbls with upside to 329 mmbbls.

Prior to spudding the Okoro-14 development well, Afren and Amni side-tracked the existing Okoro-5 production well on the Okoro main field. As part of the partners’ ongoing reservoir management and production optimisation work, the objective of the side-track well was to access additional oil volumes in a previously un-swept area of the reservoir within the Okoro main field area. The Okoro-5 well was re-entered and side-tracked at a measured depth of 4,481 ft, and the side-track subsequently drilled to a total measured depth of 9,800 ft. The side-track successfully encountered oil pay in the target reservoir, in line with prognosis, and a 2,500 ft lateral drainage section within this pay zone has been bought onstream at a stabilised rate of 2,000 bopd.

Osman Shahenshah, Chief Executive of Afren, commented:

“I am particularly delighted that we have started early development drilling at the Okoro East field, six months after the initial discovery. The Afren team has a demonstrable fast-track development capability and we are now creating tangible value and volume growth from our exploration campaign. Using existing infrastructure we expect an exceptional economic return from the early development wells. Furthermore, the completion and commissioning of the side-track well is a further example of how we are successfully optimising production and maximising economic oil recovery at the core Okoro main field development which we first bought onstream in 2008.”

Okoro East – background information

The Company announced on 17 January 2012 that the Okoro East well (Okoro-13), offshore south east Nigeria, had encountered 549 ft true vertical thickness (TVT) of net oil pay and 41 ft of net gas pay in excellent quality reservoir sands.

The well was spudded on 18 December 2011 and reached a total measured depth of 8,751 ft measured depth (8,016 ft true vertical depth), with the Transocean Adriatic lX jack-up drilling rig. The well successfully encountered oil in Tertiary reservoir sands equivalent to those that have been developed and are in production at the Okoro main field, in addition to the deeper previously unexplored reservoirs. The discovery of significant pay in the previously unexplored deeper zones opens up further prospectivity at similar levels on the main Okoro field and elsewhere on the block.

Okoro East is in a similar structural setting to the Okoro main field with a fault sealed 3-way dip closure in Tertiary reservoir sands at equivalent intervals those already in production at the Okoro main field. In addition, the Okoro East (Okoro-13) well was targeting a deeper horst block structure, a play concept that had not been previously tested on the block. The prospect was mapped on good quality 3D seismic data.

In March 2012, three drill stem tests (“DSTs”) were undertaken and completed. The purpose of the tests was to obtain fluid samples and pressure data in order to establish reservoir connectivity, heterogeneity and quantify permeability and porosity. The tests successfully confirmed a high quality 38° to 40° API oil, multi Darcy permeabilities and average porosity of between 30% to 35%, in the subject reservoirs. The pressure data also obtained has helped with the Company’s structural understanding of the field and supports the pre drill volumetric estimates (Pmean STOIIP of 157 mmbbls).

The Company intends to firstly utilise the available well head slots on the existing Okoro platform, which will be tied back to the Okoro FPSO. This production information will allow Afren and Amni to finalise full field development options, which could potentially involve up to a further eight production wells under a full field development scenario.

Press Release, July 27, 2012

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