Capital Markets Morning Presentation Materials 23 January 2012 Capital Markets Morning presentation materials
Capital Markets Morning Section page 1. Delivering against strategy 4 2. Nigeria the engine for growth 9 3. Technical and production update 16 4. Exploration 52 5. Finance update 89 6. Conclusions 93 Capital Markets…
Afren plc 1. Delivering against Strategy www.afren.com Capital Markets Morning presentation materials
Transformational growth Fast growth via acquisition and development since IPO in 2005 December 2005 December 2011 Market Value: US2,100m Market Value: US50m Production: 55,363 boepd Kurdistan Production: Zero region of Iraq…
Our strategy Delivery of sustainable long term growth Target material 2P/2C additions Growing production (in line with historical acquisition profile underpinning…
A portfolio in place capable of delivering superior growth 29 assets in 12 countries; 1,026 mmboe 2P + 2C and 3,515 mmboe prospective upside NIGERIA Working Operated Asset Interest Partner by Afren KURDISTAN REGION OF IRAQ Okoro…
Delivery against Strategy Answering the Critics Ebok production and 14 production wells associated with initial phases of Ebok field 2011 exit rate development onstream and producing Met 2011 exit rate guidance Acquisition…
Afren plc 2. Nigeria the engine for growth www.afren.com Capital Markets Morning presentation materials
Afren in Nigeria the partner of choice Foundations built on strong partnerships and alignment with indigenous companies OML 26 OPL 907/917 OPL 310 Okoro Ofa Okwok Ebok OML115 Slide 10 Capital Markets Morning…
Afren in Nigeria Operational track record Okoro: Fast Track development First Oil achieved within 2 years of signing agreement with indigenous partner Ebok: Reserves growth & production Farm-in agreement announced in April…
Afren in Nigeria Significant future growth Okoro-East Future growth Ebok NFB and WFB through current Okwok portfolio OML 115 OPL 310 Opportunity to further partner with indigenous operators Future growth with existing…
Nigeria - a world of opportunity Nigeria remains at the heart of Afrens future growth ambitions Licence interests Distribution of resource ownership (No. of blocks) (mmboe) Indigenous Indigenous independents well Major IOC E&P -…
Afren in Nigeria Ahead of the competition Oando Sahara Oil Conoil Seplat & Seven Energy Maurel et Prom Afren is differentiated because of our track record Slide 14 Capital Markets Morning presentation materials
Transferring a core production and development skill set developed in Nigeria Strategic entry to the Kurdistan region of Iraq Leverage strong development track record Early mover advantage Kurdistan region of Iraq Fast track,…
Afren plc 3. Technical and production update www.afren.com Capital Markets Morning presentation materials
Group technical structure The team in place to monetise the portfolio Chief Operating Officer Group Technical Director Development & Production Exploration Production Exploration Director Director Subsurface Manager &…
Visible production profile Only 8% of 2P/2C developed Net 2P & 2C recoverable reserves: Okoro 1,026 mmboe* First Oil achieved in 2008 Okoro East transforms outlook Okwok: 29 Okoro: 11 Ain Sifni: 8 Ebok Ebok: 67 Other: 29 Initial…
2012 work programme The most active work programme in Afrens history Gross resources Number of E&A 2012 Group activity summary Country WI (%) Work Programme targeted mmboe wells planned Production & Development Ebok Nigeria 100%…
Okoro field development Afrens maiden greenfield development project offshore south east Nigeria Okoro field (producing) Okoro East (new discovery) Ima field export terminal Slide 20 Capital Markets Morning presentation…
Okoro field development Optimising production and maximising recovery Through good field management and infill drilling, the oil production rate at the Okoro field was maintained at an average daily rate in 2011 of 16,000 bopd…
Okoro field development Building a detailed first-hand knowledge of the subsurface Two main reservoir Okoro-8 levels Okoro-9 Okoro-7 Okoro-6 At least seven oil columns Okoro-12 Drain Section Production from four sands…
Okoro field development Okoro field optimising production and maximising recovery; moving towards the 3P recovery case Actual field performance vs 2009 reservoir model 40 2.0 36 1.8 32 1.6 Field Oil Rate, STB/D (thousands)…
Ebok field Building a new production hub offshore south east Nigeria Slide 24 Capital Markets Morning presentation materials
Ebok field Central wellhead platform after Transocean Adriatic IX rig moved from location Slide 25 Capital Markets Morning presentation materials
Ebok field facilities update Phase 2 development drilling Slide 26 Capital Markets Morning presentation materials
Ebok field facilities update Simultaneous operations at the Ebok field Slide 27 Capital Markets Morning presentation materials
Ebok field Operational update All wells associated with the initial development phases commissioned by December 2011 Performance in line with prognosis and production stabilised Production processing systems and crude offtake…
Ebok field D 1 reservoir Ongoing development of the D1 reservoir planned in 2012 NW Drill Line SE Ebok 13P D-1 SD -2553 Proposed CFB D1 Well D- OW 1 C D1 reservoir depth structure map E-27HZ E-1 E-25st Hz E-14Hz WFB…
Ebok field LD 1F reservoir Amplitude with time structure map indicating planned well locations Proposed LD-1F WFB Locations 633 AC Amplitude has possible down-dip conformance to structure 5 15st3 15st1 15…
Ebok field LD 1F reservoir Seismic line through LD 1F reservoir and planned well trajectory N S LD-1E LD-1F Proposed WFB LD-1F Horizontal Well Slide 32 Capital Markets Morning presentation materials
Okwok 3D seismic acquisition over the whole Ebok/Okwok/OML 115 area will help development planning Survey Start: June 24, 2011 Survey Completed: November 4, 2011 138 days including MOB Ebok: 40.518 km2 (11.79%) OKWOK EBOK…
Okwok Good play definition in the Lower D sands from new seismic will guide 2012 appraisal drilling Old seismic unable to explain New seismic clarifies stratigraphic OKW-7/OKW-8 well results picture and allows for better targeting…
Okwok Most likely field development solution FDP submission to follow 2012 appraisal drilling Not to scale Slide 35 Capital Markets Morning presentation materials
Barda Rash PSC Independently estimated gross recoverable resources Reservoir evaluation studies have identified 1.47 billion barrels of recoverable 2C oil resource in multiple reservoirs Approximately 500 million barrels of light…
Barda Rash PSC Location of the existing wells and development area BR-1 discovery well Spudded in April 2009 Drilled to 3,300 m depth Oil encountered from Cretaceous to Jurassic No OWC established Mus and Adaiyah formations…
Barda Rash PSC Phased development programme Phase I Workover of the existing three wells to test and establish production through an Early Production Facility (EPF) in 2012 Acquisition of a 3D seismic survey for improving…
Barda Rash PSC Phase I objectives Workover the three existing wells Check well integrity Proper H2S equipment and procedures Cased-hole logging program Further testing Completions targeting 3,000-5,000 bopd per well Install an…
Barda Rash PSC Early Production Facilities concept selection Two early production concepts have been considered 1. Local separation, treatment, storage and truck offloading at the BR-1 location with flowline access to fluids from…
Barda Rash PSC Understanding the fracture system from the wells drilled to date drilling mud loss into fracture zones Slide 41 Capital Markets Morning presentation materials
Barda Rash PSC Phase II and Phase III development In Phase II a mix of vertical and horizontal wells will be drilled to ramp-up to 35,000 bopd whilst also further appraising the field Following the first two phases of development, a…
OML 26 Large scale production and development opportunity Acquisition of 45% interest through 940 mmboe total gross reserves and resources First Hydrocarbon Nigeria (Afren a Currently producing * 2% 45% shareholder) completed…
OML 26 Location map Isoko Field 56km Ogini Field 63km Onshore Nigeria, Delta State East of Warri East of Warri Two developed fields (Ogini and Isoko) Three undeveloped fields (Aboh, Ovo and Ozoro) Crude export is via the…
OML 26 Ogini field summary Ogini Field OML 26 Discovered: 1964 Production start up: 1971 23 wells have been drilled. There are 11 currently producing drainage points Simple roll-over anticline structure. Sedimentology consists…
OML 26 Isoko field summary ERC E2000 TWT interpretation Isoko Field OML 26 West East Discovered: 1959 Production start up: 1976 HEP structure 7 wells drilled back to time NW to SE trending crestal structure…
OML 26 Detailed seismic re-mapping and structural modeling of Ogini and Isoko Slide 47 Capital Markets Morning presentation materials
OML 26 Geological modeling undertaken for reservoir simulation input ( E m p t y W e l l s e c t i o n w i n d o w ) Slide 48 Capital Markets Morning presentation materials
OML 26 Discovered un-developed Aboh, Ovo and Ozoro fields OZORO-2 Gross 2C 100% Remaining Hydrocarbons* 10 Oil (mmbbls) 0 Condensate (mmbbls) 19 Natural Gas (bcf) 13 Total (mmboe) Asset Type: Shut-in field, produced 1 mmbbls…
OML 26 Operating framework and capital requirements Afren will provide technical and operational management services to FHN under an agreed set of terms FHN will partner with NPDC in re-development of the block Full field development…
2012 FY expected production Strong production growth forecast Group net working interest production 50,000 40,000 30,000 20,000 10,000 0 2008 2009 2010 2011 2012E Significant step up in production in 2012 as a result…
Afrens exploration portfolio An attractive portfolio located across several highly prospective basins Ghana: 494 Nigeria: 530 Low risk, quick to monetise opportunities Proven play concepts, significant upside Kurdistan: 183 JDZ: 15…
Exploration strategy and objectives An exploration strategy that is focused and clear Strategic emphasis Develop a portfolio structured around play based themes Oil focus Prepared to move early if opportunity merits it Identify…
Exploration strategy and objectives Understanding risk and uncertainty is key to the decision making process We seek to understand and evaluate three key aspects of a play, lead or prospect that influence the decision making process…
Exploration strategy and objectives Technical maturity is crucial to unwinding risk and uncertainty Highest PoSg for Highest PoSg for Highest PoSg for unproven play, no proven play, no proven play, amplitude amplitudes, 2D…
Low risk quick to monetise opportunities The Tertiary systems of the Niger Delta and fractured carbonates of the Kurdistan region of Iraq Frontier area, Low risk, play opening quick to potential: monetise: 60% 20% Balanced risk…
Okoro East A material new oil discovery and validation of previously un-explored play concept at deeper levels NNW SSE Okoro East prospect NNW Defined on good quality 3D 3-way dip-closed structure at same intervals as okoro main…
Okoro East A material new oil discovery and validation of previously un-explored play concept at deeper levels Dip section with time slice illustrating underlying horst block below the Okoro East prospect NNW SSE Time slice at 2000…
Okoro East Depth seismic section at TD Slide 60 Capital Markets Morning presentation materials
Okoro East Seismic section demonstrating growth across horst fault LSJ LSK LSJ LSK Slide 61 Capital Markets Morning presentation materials
Okoro East Pre-drill expectations Pre drill Summary STOIIP for Okoro East P90 Mean P10 Okoro 19 47 86 Reservoirs Deeper targets 38 110 243 Unrisked Total 57 157 329 Slide 62 Capital Markets Morning presentation…
Okoro East Additional potential identified at Okoro West LSC time structure map Okoro West - LSC Time Structure Okoro West upside potential Okoro Field Okoro East Slide 63 Capital Markets Morning presentation materials
Ebok and OML 115 Low risk, amplitude supported exploration Seismic survey Ocean bottom cable, four component 3D seismic survey across whole area Advanced technology to further enhance regional understanding E&A drilling will…
Ebok field North Fault Block prospect Seismic section along dip and planned well trajectory N SE NFB ST LD-1E Success NFB Case Proposed Location Slide 65 Capital Markets Morning presentation materials
Ebok field North Fault Block prospect Seismic section along strike and planned well trajectory SW NE Ebok 5 NFB Proposed Location Strike Line Ebok 3 Slide 66 Capital Markets Morning presentation materials
OML 115 Several prospects and leads have been identified at the upper levels Recent high quality oil discoveries near Ufon complex Etisong N-1 (2011) Ufon prospect Three reservoirs found. Exploration well H2 2011 Tested 8,500…
OML 115 Benin surface indications of un-drilled structural highs Numerous undrilled targets in traditional upper part of sedimentary section Slide 68 Capital Markets Morning presentation materials
OML 115 Drilling results at Ebok suggest deeper potential also exists High quality Isongo sands found in Ebok-6 may be found over numerous large structures Good prospects for deep exploration Slide 69 Capital Markets…
Ebok/Okwok/OML 115 area Only 31% of total area resource potential is reflected in current 2P + 2C estimates Ebok 2P 508 mmbbls gross unrisked 106.5 resource potential Okwok The Ebok/Okwok/OML 115 Contingent 51.8 area is not just…
Exploring in the Kurdistan region of Iraq Drilling results are confirming potential; oil reserves are increasing Kurdistan region of Iraq awarded its first World class exploration success rate PSCs in 2003 - 36 awards made in…
Ain Sifni PSC Low risk opportunity to efficiently deliver large volume growth Exploration and appraisal highlights JS-2 exploration well spudded in Q4 2011 to test the western extent of the Jebel Simrit structure; possibility of…
Proven play concepts with significant upside Exploring the West Africa Transform Margin Frontier area, play opening Low risk, potential: quick to 60% monetise: 20% Balanced risk weighting Proven play concepts, significant…
The West Africa Transform Margin An attractive acreage position in a prolific and emerging exploration fairway Block CI-11 (47.96%) Block CI-01 (65.00%) Keta Block (35.00%) OPL 310 (70.00%) (oil and gas production) (exploration &…
Keta block - Ghana Focused exploration in a high potential basin Slide 75 Capital Markets Morning presentation materials
Keta block - Ghana Focused exploration in a high potential basin ENI farmed in for a 35% working interest; Afren retains a 35% working interest - Full carry through exploration well Large scale prospectivity identified - 1,412…
Keta block - Ghana The Cuda prospect geological setting S N Gravity-driven slumping of the Campanian section attributed to thrusting during the Maastrichtian Slide 77 Capital Markets Morning presentation materials
OPL 310 - Nigeria High grade prospectivity identified New electromagnetic data integrated with seismic Good definition on prospects and leads Drilling post successful farm down New 3D seismic to be acquired in 2012 Slide…
Frontier areas with major play opening potential The rift and coastal systems of East Africa Frontier area, Low risk, play opening quick to potential: monetise: 60% 20% Balanced risk weighting Proven play concepts, significant…
Afren East Africa exploration activity summary Exploring east Africas rift systems Ethiopia Assets Blocks 7,8 30% Forward exploration focused on Blocks 7 & 8 Ethiopia Kenya 2 6 Assets Blocks 1, 10A, L17/L18 50%, 20%, 100% 7 8…
Blocks L17/L18 in Kenya and the Tanga Block in Tanzania Play opening opportunities at L17/L18 and Tanga Block Possible early success + early monetization Mombasa 1 million people Refinery Power stations Block L17 Ria Kalui-1…
Exploring the Kenya Tanzania coastal high Play opening opportunities at L17/L18 and Tanga Block Coastal Subsiding Fault Blocks Play Fairway Play Summary Trap: Regional NNW -SSE trending faults affect the entire sedimentary…
Exploring the Kenya Tanzania coastal high Play opening opportunities at L17/L18 and Tanga Block Exploration drilling planned for 2012 testing the costal area play offshore Exploration well on each of L17/L18 and Tanga Target…
Blocks L17/L18 - Kenya Hydrocarbons on Mombasas doorstep SW Mombasa lead NE Near Top Cretaceous TWT Structure Map L17 Kenya Mombasa New shallow water (0-20m) 2D seismic has E been acquired in the near-shore focus areas W where…
Tanga block - Tanzania Attractive acreage contiguous with Kenyan blocks L17/L18 Miocene 10.5 Ma TWT Structure Map 7,063 km2 licence covering onshore and L18 Block offshore areas adjacent to Kenya L17/18 licence 10 km Southerly…
Tanga block - Tanzania Offshore expression of the coastal high trend SSW NNE 0.5 1.0 TWT (Seconds) 1.5 2.0 2km 2.5 Slide 86 Capital Markets Morning presentation materials
Kenya Block 10A Oil shows throughout the Cretaceous provide evidence of a working petroleum system Sirius 1 Oil Shows Lead B (Sirius updip) Lead C Lead D 4km Large faulted leads incorporate juxtaposition of proven…
Afrens exploration portfolio An attractive portfolio located across several highly prospective basins Ghana: 494 Nigeria: 530 Low risk, quick to monetise opportunities Proven play concepts, significant upside Kurdistan: 183 JDZ: 15…
Robust capital structure The financial flexibility to develop the portfolio and support growth Approximately US292 million* cash at bank end 2011 Cash generative portfolio cash flow in excess of forward capex Hedges in place for 2012…
2012 hedging summary Managing exposure to commodity price risk 4 mmbbls of Ebok production volumes are currently hedged Ebok Tranche 1 - 1,600,662 bbls hedged in 2012 at minimum US80 with deferred premium puts Ebok Tranche 2 -…
2012 capital expenditure Exploration is a key component FY 2012 capex spend US450 to US500 million Majority of capex 38% is discretionary Development 21% E&A Drilling Seismic and non-drilling 41% 40% 60% 26% Ebok…
Afren plc 6. Summary and outlook www.afren.com Capital Markets Morning presentation materials www.afren.com
Conclusions Well positioned for further significant growth In 6 years the team has delivered an asset base with significant scale and upside Nigeria is the engine for growth and further expansion Stable production base and visible…
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