Petroleum Africa
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Monday, December 19, 2005
Afren reports that its brokers, Bridgewell Securities Limited and Jefferies International Limited, have placed 24,444,441 new ordinary shares with a range of institutional investors. The new shares were placed at a price of 45 pence per share, raising £11.0 million for the company. According to Afren, it has applied to the
The placement follows the company’s award of two new offshore development opportunities in
Afren’s second development opportunity is the Akepo field, which is adjacent to the Ogedeh field. The award of this field was announced in early-December. Like the Ogedah, the Akepo field was also discovered by Chevron in 1993 and has yet to be commercially developed. The field is thought to contain between 10-20 million barrels of recoverable oil resources.
The proceeds of the placing will allow for the company to secure a Letter of Intent for a jack-up rig contract for the drilling of two appraisal wells on the Ogedeh and Akepo discoveries. The company is currently in advanced stages of negotiations to secure a rig for these wells. Drilling is expected to begin in the second quarter of 2006. The company plans to suspend the wells after drilling and re-enter them for tie-back as producing wells in 2007.
The locations of both fields, in shallow water offshore Niger Delta; mean that the costs of development are likely to be comparatively low. Analysis already conducted on both fields indicates that they could together produce 10,000 barrels per day upon full field development.
Commenting on the placement of shares, Brian O’Cathain, Chief Executive of Afren said, "We are pleased with the positive response to the placement and the continuing support of our shareholders. The proceeds will ensure that these wells can be drilled in the first half of 2006 and that the fields can move towards first oil in early 2007.”
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