afren 2013 half yearly factbook.pdf

8/14/2019 Afren 2013 Half Yearly Factbook.pdf

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Afren plc2013 Half-Yearly ResultsFact Book

Ahead ofthe curve


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Cte

dIvoire Ghana

Nigeria

So Tom & Prncipe

Congo

Madagascar

South

Africa

Tanzania

Seychelles

Kenya

Ethiopia

Kurdistan

region of Iraq

1

Afren plc - 2013 Half-Yearly Results Fact Book

Afren plc

LEADERSHIP ACROSS THREE BUSINESS UNITS

Key figures from across Afren

Net reserves and resources

mmboe

Afren East Africa Exploration 6,058

Nigeria and other West Africa 1,577

Kurdistan region of Iraq 1,052

=

Gross acreage 122,000 sq km

Total number of employees and contractors 485

1H 2013 net working interest production(inc. OML 26) 47,653 boepd

Net 2P (mmboe) 269

Net 2C (mmboe) 932

Pmeanprospective resources (mmboe) 7,487

1,577

6,058

8,687

1,052


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Nigeria andother West Africa

Afren East AfricaExploration

Kurdistan regionof Iraq

1,577 mmboe 6,058 mmboe 1,052 mmboeNigeria and other West Africanet reserves and resources

Afren East Africa Explorationnet resources

Kurdistan region of Iraq netreserves and resources

Through strategic foresight Afren has assembled a balanced and focused portfolio of

world-class assets consisting of high-impact exploration and appraisal opportunities, and

high margin producing assets. These are organised into three core business units: Nigeria

and other West Africa, Afren East Africa Exploration and the Kurdistan region of Iraq.

We hold market leadership positions across each of our business units and are well

positioned to deliver further growth capitalising on our early mover advantage, our

financial & technical strength and operational track record.

Exploration

Business model key

Appraisal and Development

Production

To date, we have successfully delivered

two high-quality Nigerian development

projects in Ebok and Okoro in record time,

and have built a portfolio of six further

development, appraisal and exploration

projects. Our acquisition and partnership-

led growth is evidence that, as pressure

mounts on the incumbent asset holders to

optimise development of Nigerias national

hydrocarbon resources and develop local

capacity, a secondary asset acquisition and

divestiture market is opening up in the

country. We are very well positioned within

this market and the future for us in Nigeria

is bright.

Beyond Nigeria, our other West African

portfolio includes production assets in Cte

dIvoire and attractive exploration acreagein Ghana, Congo Brazzaville and South

Africa.

Afrens East African exploration portfolio

today covers an extensive surface area of

100,221 km2on a gross basis, focused

on Cretaceous, Jurassic and Tertiary riftbasins which are geological settings that

have yielded significant discoveries in

Uganda, Sudan, Tanzania, Madagascar,

Mozambique and, most recently, Kenya.

Since the acquisition, Afren has

significantly increased the seismic coverage

with a total of 9,444 km 2D and 5,607 km2

3D acquired across the portfolio.

In recognition of the opportunity at hand,

in 2011, Afren undertook its most ambitious

acquisitions to date by acquiring the Barda

Rash (60% operated) and Ain Sifni (20%non-operated) PSCs located in the Kurdistan

region of Iraq, from Komet Group and the

Kurdistan Regional Government respectively.

Thematically, the Kurdistan region of

Iraq shares similarities with the Nigerian

and other West African opportunity set.

Although oil has been discovered in

abundance and plays proven, the region

until very recently has nevertheless been

overlooked by, or remained out of reach for,

much larger international companies.

This has created a window of opportunity

for smaller, agile independents to secure

assets with world-class potential.

The acquisition is consistent with our

strategic priorities and at the time delivered

independently certified net 2P and 2C

resources at US$0.68 per 2P and 2C bbl

well below other regional transaction values.

As the region develops politically, we are

one of the best-placed resource companies

to benefit from significant reserves growth,

de-risking of the geopolitical landscape

and a consequent realisation of sustained

oil export revenues.

Balanced portfolio of assets across thefull-cycle E&P value chain

Proven track record as an explorer and afast track developer

Gross acreage position >20,100 km2

Regional offices in Lagos, Nigeria andAbidjan, Cte dIvoire

Diversified geology and play types

Proved working hydrocarbon systems

High-equity positions

In possession of the largest seismicdatabase in East Africa

Gross acreage position >100,200 km2

Regional office in Nairobi, Kenya

World-class assets located in a prolifichydrocarbon province

Early mover advantage (entry costUS$0.68 per 2P and 2C bbl)

Gross acreage position >860 km2

Regional office in Erbil



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Afren plc

1H 2013 HIGHLIGHTS

Production by Type(1H 2013)

Revenue by Type(1H 2013)

Net Prospective Resources

Production by Country(1H 2013)

Revenue by Country(1H 2013)

Net 2P & 2C Reserves and Resources

Gas 6%

Oil 100%

Ghana 380

Madagascar 631

Nigeria 2 686

Congo 35

Seychelles 2,101

Cte dIvoire 57

South Africa 88

Ethiopia 103

Cte dIvoire 6%

Oil 94%

Tanzania 1 1,463

Kurdistan regionof Iraq 3183

Kenya 1,760

Nigeria 94%

Nigeria 100%

47,653 boepd *

US$797.0 mm * US$797.0 mm *

7,487 mmboe

47,653 boepd *

Ebok 63

OML 26 156

Okwok 29

Setu 1

Okoro 31

OML 113 28

Ain Sifni 8

CI-01 24

Barda Rash 860

1,200 mmboe

* Working interest, including natural gas liquids from Cote dlvoire and associated volume from First Hydrocarbon Nigeria (FHN)

* From continuing operations

1 Resources upgrade on Tanga Block, Tanzania in 1H 2013.Previously 1,681mmboe gross prospective resource end December 2012

2 Post FHN consolidation3 Prospective resources to be updated following successful Simrit -2 and

Simrit -3 exploration wells in the Kurdistan region of Iraq



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42013 HALF YEAR RESULTS SUMMARY

Revenue (US$mm) 2 797 778 + 2%

Gross profit (US$mm) 2 377 411 - 8%

Profit before tax (US$mm) 2 260 311 - 16%

Profit after tax (US$mm) 2 62 102 - 39%

Normalised profit after tax (US$mm) 2 & 3 112 119 - 6%

Cash flow from operations (US$mm) 4 564 571 - 1%

Realised oil price (US$/bbl) 104 109 - 5%

Net working interest production (boepd) 47,653 42,169 + 13%

Financial Highlights

Other information

Number of shares in issue: 1,088,811,128 (as at 30 June 2013)

Number of shares (fully diluted): 1,149,058,915 (as at 30 June 2013)

1H 20131H 2012

(restated 1) Change (%)

1 Prior period results have been restated to reflect the consolidation of FHN, following the adoption of IFRS 10 and IFRS 11.Further details are provided in Note 1 and Note 14 of the condensed financial statements, in 2013 Half-yearly report,available on www.afren.com

2 From continuing operations, for further details see Note 13 of the condensed financial statements, in 2013 Half-yearly report,available on www.afren.com

3 See Note 4 of the condensed financial statements, in 2013 Half-yearly report, available on www.afren.com4 Operating cash flow before movements in working capital



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CAPEX PROGRAMME5Afren plc

Capital Expenditure Strategy

Afren continues to allocate its capital to projects that offer superior returns for shareholders:

2013 development capex budget focused on key projects offshore south east Nigeria and onshore Kurdistan

region of Iraq.

Exploration expenditure focused on selective high impact multi-well drilling campaign and new seismic

acquisition.

1H 2013 Capex by Category

Ebok 70%

Development 62%

Okoro 1%

OML 26 1%

E&A Drilling 23%

Seismic and non-drilling 15%

Barda Rash 28%

US$329 mm

1H 2013 Development Capex byAsset



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CURRENT DEBT PROFILE7Afren plc

1H 2013US$mmFacility Type Coupon Profle

A capital structure in place to deliver the next phase of growth:

Mature debt profile offering financial flexibility - majority of debt long dated 2016/2019

With forward E&A capex internally funded, and significant additional working capital available, the Companys

ability to capitalise on future organic and inorganic growth opportunities has been greatly enhanced

2016 Senior Secured Notes 500 Semi-annual coupon of 11.5%

2019 Senior Secured Notes 300 Semi-annual coupon of 10.25%

Ebok facility* 186 LIBOR +4.0%

FHN debt ** 175 See notes

Unsecured Corporate facility *** 50 LIBOR +4.5%

Capitalised borrowing costs (33)

* On 22 March 2013 Afren signed a new US$300 million Ebok facility which has a three year term and bears interest at Libor plus 4.0-4.8%

** FHN debt consists of (1) A&D facility US$85 million (8.5% coupon), (2) Access bank facility US$34 million (LIBOR+9% coupon) (3) KingdomZephyr convertible loan US$56 million (20% coupon). The Kingdom Zephyr convertible loan was redeemed in July 2013 - See Note 14 ofthe condensed financial statements for further information, in 2013 Half-yearly report, available from www.afren.com

*** The unsecured corporate facility was repaid in full in July 2013



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Cte dIvoire CI-01 65% 37.3 mmboe Discussions are continuing with Petroci and the Cte dIvoireGovernment on the forward programme

PRODUCTION AND DEVELOPMENTOPPORTUNITIES

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Afren plc

KurdistanRegion ofIraq

Barda Rash 60% 1,433 mmbbls Preliminary crude oil sales of 1,300 bopd achieved since8 July 2013

Production is to be initially ramped up to 5,000 to 6,000 bopd

The BR-5 well was drilled in March 2013 using the Romfor-23drilling rig which is currently drilling ahead at around 7,200 ftand commenced drilling the BR-4 in May using the Viking I-10rig, which is currently drilling ahead at around 10,200 ft

Asset

* Effective working interest pre/post cost recovery** Economic Interest

Source: NSAI reserves and resources remaining at 31 December 2012 Source: RPS Energy as at 26 March 2012

Country

Effective

WorkingInterest

Gross Remaining

2P/2C Reserves& Resources Status Update

Nigeria Okoro &Okoro East

50%* 62.5 mmbbls Gross production averaged 17,815 bopd at the Okoro fieldduring the first half of 2013

The Partners have commenced the Front End EngineeringDesign (FEED) and development plans for the fabrication of anew wellhead platform and production unit required for thefull development of the Okoro Further Field Development

The wellhead platform will have 12 well slots capable ofholding dual trees, which would enable the platform to hostup to 24 wells

Nigeria Ebok & EbokNorth FaultBlock (NFB)

100%/50%* 116.1 mmbbls Gross production at the Ebok field was 33,884 bopd duringthe first half of the year

During the first half of 2013, the Partners successfully drilledtwo producers from the Ebok North Fault Block (Ebok NFB)

Central Fault Block extension platform will set sail for Nigeriain November 2013. The wells from this platform will targetreservoirs which contain approximately 38 mmbbls of 2Preserves

Nigeria Okwok 70%/56%* 51.8 mmbbls Submission of Field Development Plan expected shortly,following the drilling of the Okwok-11 side-track well whichwas successfully encountered 95 ft of net oil pay

Nigeria OML 113 16.9%** 167 mmboe OML 113 is located offshore Nigeria, and is contiguous to the

Afren operated OPL 310 block Three (Aje-1, Aje-2 and Aje-4) of the four wells drilled on the

field have encountered oil and gas and two (Aje-1 and Aje-2)of the wells have comprehensively tested at commercial rates

The JV partners are considering drilling and commencementof early production on the Aje field with full field developmentat a later stage likely in synergy with the recent discovery atOPL 310

Nigeria OML 26 45% 202.6 mmbbls (Ogini & Isoko)144 mmboe(Aboh, Ovo,Ozoro)

During the period, gross average production from the Oginiand Isoko fields was 4,267 bopd. The Partners submittedthe Ogini Field Development Plan on 29 July 2013, and arecurrently awaiting DPR approvals

The Ogini FDP consists of the drilling of 37 production wells

The Ogini FDP drilling campaign is scheduled to commencein Q4 2013 and will be targeting peak production of 35,000bbls/d by 2016

The Isoko FDP submission is expected in Q4 2013



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2013 E&A WORK PROGRAMME11Afren plc

Nigeria Okwok 70%/56%* Appraisal

Nigeria OML 115 100%/50%* 65

Nigeria OPL 310 40%** 202

Kurdistan Region of Iraq Ain Sifni 20% 661

Ethiopia Blocks 7 & 8 30% 100

Seychelles Areas A, B 75% -

Tanzania Tanga Block 74% -

Congo La Noumbi 14% -

South Africa Block 2B 25% -

Kenya Block 10A 20% 100

Asset

*

**

Effective working interest pre/post cost recovery

Following the announcement of the farm-out to Lekoil Limited (Lekoil) on 14 May 2013, subject to Nigerian Ministerial consent.Economic interest post Afren and Optimum achieving cost recovery

Seismic survey acquisition

Seismic processing

Exploration drilling

Appraisal

Field development plan to follow

CountryWorkProgramme

EffectiveWorkingInterest (%)

Grossprospect sizemmboe

F

A

F

E

E

E

E

E

E

E

E

S

SA

S

S

S



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Afren plc

31 December 2011 68.86 - 68.86 0.47 9.51 2.10

Revisions of previous estimates 0.03 - 0.03 (0.05) 3.89 0.62

Discoveries and extensions 39.15 - 39.15 - - -

Acquisitions - - - - - -

Divestments - - - - - -

Production (14.15) - (14.15) (0.14) (4.20) (0.87)

At 31 December 2012 93.89 - 93.89 0.27 9.20 1.86

31 December 2011 98.62 - 98.62 13.34 75.48 26.35

Revisions of previous estimates 0.03 - 0.03 (0.05) 3.89 0.62

Discoveries and extensions 39.15 - 39.15 - - -



Production (14.15) - (14.15) (0.14) (4.20) (0.87)

At 31 December 2012 123.65 - 123.65 13.14 75.17 26.10

31 December 2011 29.76 - 29.76 12.87 65.98 24.25

Revisions of previous estimates - - - - - -

Discoveries and extensions - - - - - -



At 31 December 2012 29.76 - 29.76 12.87 65.98 24.25

*NigeriaGroup Proved andProbable Reserves

Contingent Resources

Total Reserves and Contingent Resources

**Cte d`Ivoire

Oil(mmbbl)

Oil(mmbbl)mmboe mmboe

Gas(bcf)

Gas(bcf)

Reserves and resources above are stated on a working interest basis (i.e. for the Nigerian contracts our net effective ultimate workinginterest based on working interest to payback (95% to 100%) and WI post payback (50%))

Proved plus Probable (2P) reserves have been prepared in accordance with the definitions and guidelines set forth in the 2007 PRMSapproved by the SPE

Contingent resources are those quantities of petroleum that are estimated to be potentially recoverable from known accumulationsbut for which the projects are not yet considered mature enough for commercial development due to one or more contingencies

Quantities of oil equivalent are calculated using a gas-to-oil conversion factor of 5,800 scf of gas per barrel of oil equivalent

The oil price used by NSAI and RPS Energy for their independent reserve and resource assessments was US$100/bbl flat

The Group provides for depletion and amortisation of tangible fixed assets on a net entitlement basis, which reflects the terms of thelicences and agreements relating to each field. Total net entitlement reserves were 110.9 mmboe at 31 December 2012

NET RESERVES AND RESOURCES SUMMARY


At 31 December 2012


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- - - 114.00 - 114.00 183.33 9.51 184.96

- - - - - - (0.02) 3.89 0.65

- - - - - - 39.15 - 39.15

- - - - - - - - -

- - - - - - - - -

- - - - - - (14.29) (4.20) (15.1)

- - - 114.00 - 114.00 208.17 9.20 209.75

1.87 - 1.87 868.20 - 868.20 982.03 75.48 995.04

- - - - - - (0.02) 3.89 0.65

- - - - - - 39.15 - 39.15

- - - - - - - - -

- - - - - - - - -

- - - - - - (14.29) (4.20) (15.01)

1.87 - 1.87 868.20 - 868.20 1,006.87 75.17 1,019.83

1.87 - 1.87 754.20 - 754.20 798.70 65.98 810.08

- - - - - - - - -

- - - - - - - - -

- - - - - - - - -

- - - - - - - - -

1.87 - 1.87 754.20 - 754.20 798.70 65.98 810.08

***Nigeria -So Tom& Prncipe JDZ

Kurdistanregion of Iraq Total Group

Oil(mmbbl)

Oil(mmbbl)

Oil(mmbbl)mmboe mmboe mmboe

Gas(bcf)

Gas(bcf)

Gas(bcf)


Following shareholder approval on 20 May 2013, Afren announced on 29 May that it had completed the acquisition of an additional 10.4per cent. beneficial interest in First Hydrocarbon Nigeria (FHN) for a total consideration of US$37.05 million in cash. The acquisition (andadoption of IFRS 10) results in Afren consolidating its holding of FHNs reserves and production as a subsidiary and further strengthens itsposition onshore Nigeria.

An independent assessment of the reserve and contingent resource potential of the Ogini and Isoko fields for FHN in March 2013 hasestimated the gross remaining 2P oil reserves at the fields at 134.6 million barrels and gross contingent resources at 68.0 million barrels(gross 2P & 2C reserves and resources 202.6 million barrels; 91.2 million barrels net to FHN) as at 31 December 2012. This represents a231% increase on 2P reserves previously carried by FHN and a 10% increase on previously carried 2P & 2C volumes as at 31 December2011. In addition, significant upside potential of 144 mmboe also exists within the undeveloped Aboh, Ovo and Ozoro discoveries, togetherwith an estimated 615 mmboe gross unrisked prospective resources defined across multiple prospects that will continue to be worked up inparallel to, and integrated with, future development plans.

During the period Afren agreed the sale of the CI-11 block and Lion Gas Plant to a third party for total consideration of US$26.5 million.Completion of the transaction is expected in Q3 2013

In 2012, Total commissioned and completed drilling two appraisal wells on the block, the Obo-2 well and the Enitimi-1 well, bothencountering oil and gas pay, but at lower levels than pre-drill estimates. It is anticipated that Afren will relinquish its interest in the licencein 2H 2013 and as such have decided to impair the associated costs in 1H 2013.

**

*

*

***


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Afren plc

NIGERIA - CONTRACT OVERVIEW

Okoro 100%/50%* Production Sharing Technical

Services Agreement

Companies Income Tax Act

Education Tax

Okoro East 100%/50%* Production Sharing TechnicalServices Agreement

Companies Income Tax Act

Education Tax

Ebok 100%/50%* Royalty Tax Concession Petroleum Profit Tax

Education Tax

Okwok 70%/56%* Royalty Tax Concession Petroleum Profit Tax

Education Tax

OPL 907 41%** PSC Petroleum Profit Tax

Education Tax

OPL 917 42%** PSC Petroleum Profit Tax

Education Tax

OPL 310 40% Royalty Tax Concession Petroleum Profit Tax

Education Tax

OML 115 100%/50%* Royalty Tax Concession Petroleum Profit Tax

Education Tax

OML 113 16.9%*** Sole Risk Concession Petroleum Profit Tax

Education Tax

Asset Working Interest Contract Type Taxes Applicable

* Effective working interest pre/post cost recovery

** Ager effective working interest; AGER is owned 50% by Afren, 50% by Global Energy Company (GEC)

*** Economic Interest


70% pre-cost recovery effective working interest; 56% post-cost recovery effective working interest (subject to gross volumes lifted). Once hurdle point isachieved, Afren effective working interest becomes 35%. Hurdle point is achieved when post-royalty revenue lifter by parties outside of any cost recoveryperiod is greater than USD$1.2 billion

Afren is in the process of relinquishing its interest in OPL 907 and OPL 917

Following the announcement of the farm-out agreement with Lekoil Limited (Lekoil) on 14 May 2013 (subject to Nigerian Ministerial Consent).Post farm-out, Afren will hold a 40 per cent. economic interest in the licence once Afren and Optimum Petroleum Development Ltd, the named Operator,achieve cost recovery


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16OTHER WEST AFRICA - CONTRACT OVERVIEW

Cte dIvoire CI-01 65%* PSC

Paid on behalf of the Contractorby the Government

Cte dIvoire CI-11*** 47.96% PSC Paid on behalf of the Contractorby the Government

Congo La Noumbi 14% PSC Paid on behalf of the Contractorby the Government

Ghana Keta 35% Royalty TaxConcession

Income Tax

Additional oil entitlement payment

Nigeria So Tom Block 1 4.41% PSC Petroleum Profit Tax

South Africa Thombo 25%** Royalty TaxConcession

Income Tax

Country Asset Taxes ApplicableContract TypeWorkingInterest

* With rights to an additional 15%

** Working interest increases to 50% and operatorship transferred to Afren if Afren exercises its option to drill an exploration well

*** During the period, Afren agreed the sale of the CI-11 block and Lion Gas Plant to a third party for total consideration of US$26.5 million.Completion of the transaction is expected in Q3 2013



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Afren plc

EAST AFRICA - CONTRACT OVERVIEW

Ethiopia Blocks 7/8 30% PSC Income Tax

Kenya Block 1 80% PSC Paid on behalf of the Contractor by the Government

Kenya Block 10A 20% PSC Paid on behalf of the Contractor by the Government

Kenya Block L17/18 100% PSC Paid on behalf of the Contractor by the Government

Madagascar Block 1101 90% PSC Income Tax

Seychelles Areas A,B 75% Royalty TaxConcession

Petroleum Income Tax

Tanzania Tanga Block 74% PSC Income Tax

Country Asset Taxes Applicable

Working

Interest

Contract

Type



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18KURDISTAN REGION OF IRAQ- CONTRACT OVERVIEW

Barda Rash 60% PSC Paid on behalf of the Contractor by the Government

Ain Sifni 20% PSC Paid on behalf of the Contractor by the Government

Asset Taxes ApplicableWorking

Interest

ContractType



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Afren plc

Kinnaird House1 Pall Mall EastLondon SW1Y 5AU England

T: +44 (0)20 7864 3700F: +44 (0)20 7864 3701Email: [email protected]

Afren Nigeria

1st Floor, The Octagon13A, A.J. Marinho DriveVictoria Island AnnexeLagos, Nigeria

T: +234 (1) 1279 6000

Afren Cte dIvoire, Limited

Avenue Delafosse ProlongeRDC Rsidence Pelieu04 B P 827 Abidjan 04Cte dIvoire

T: +225 20 254 000F: +225 20 226 229

Afren Resources USA, Inc

10001 Woodloch Forest DriveSuite 600The WoodlandsTexas 77380USA

T: +1 281 297 2500F: +1 281 297 2999

Afren East Africa Exploration Limited

Delta Corner, Tower B, 8th FloorWaikaki Way, WestlandsP.O. Box 61 - 00623NairobiKenya

Afren Middle East and North Africa

Erbil BranchBuilding C2Second FloorEmpire Business ComplexErbilKurdistan Region of Iraq

T +964 (0) 6626 41462

For more information go onlinewww.afren.com

afren 2013 half yearly factbook.pdf

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