2009-09-25-2009-08-25

To acquire 28% WI in Okwok Field in OML 67 offshore South East Nigeria.

Afren Plc (London: AFR) has entered into a joint-venture agreement with Oriental Energy Resources Ltd. and Addax Petroleum Nigeria Offshore Ltd., a subsidiary of Addax Petroleum Corp., to acquire a 28% interest Okwok Field in OML 67 offshore South East Nigeria in exchange for drilling commitments. Afren will fund 100% of the costs of an exploration or appraisal well in Okwok to a minimum depth of the Lower D2 horizon, after which Afren and Addax Petroleum will be required to fund all capital and operating costs for development of the field on a pro-rata basis (70% and 30% respectively). Afren will be entitled to 70% of net field revenues pre-cost recovery, reverting to 56% post-cost recovery, subject to gross volumes lifted. Okwok Field is an undeveloped oil field adjacent to Afren and Oriental's Ebok Field about 50 kilometers offshore in 132 feet of water. Afren estimates that Okwok holds in excess of 225 million barrels stock tank oil initially in place (STOIIP) with recoverable reserves in excess of 70 million barrels. Afren has identified exploration potential at the deeper Qua Iboe level with two prospects identified, each estimated to contain some 200 million barrels STOIIP. Afren chief executive Osman Shahenshah says, "The Okwok Field represents a material discovered but undeveloped opportunity in close proximity to the Ebok Field where, in partnership with Oriental, we recently enjoyed appraisal success and proved a 53 million barrels reserve base with upside to 152 million barrels. By deploying our understanding of the subsurface and experience gained at Ebok, we will seek to further delineate and prove up the reserves base at the Okwok Field. Okwok will be developed as part of a larger combined development with Ebok, offering significant synergies." Oriental chairman Alhaji Mohammed Indimi says, "Having formalized our relationship with Afren during 2008 and experienced significant appraisal success with the Ebok Field appraisal program thereafter, we welcome Afren's participation in the Okwok development. Oriental believes that Afren's presence in both projects will bring significant synergies to the development of the Ebok and Okwok fields."