Afren To Acquire Two Iraq Kurdistan PSCs

To acquire a 60% participating interest in Barda Rash PSC & 20% participating interest in Ain Sifni PSC.

Beta Energy Ltd., a subsidiary of Afren Plc, London, (London: AFR) plans to acquire a 60% participating interest in the Barda Rash production-sharing contract (PSC) from Besigheim, Germany-based Komet Group SA and 20% participating interest in the Ain Sifni PSC from the Kurdistan regional government for a total US$588.25 million.

Approximately US$418.75 million is in respect for the interest in the Barda Rash PSC.

The Barda Rash PSC is 55 kilometers northwest of Erbil. The field is defined as an elongated anticline with surface expression of 20 kilometers long and up to 7 kilometers wide. The reservoirs are principally fractured carbonates of various depositional settings. The assets hold 14.2 billion barrels STOIIP/1.47 billion barrels gross recoverable Barda Rash oil field.

The operator of the Ain Sifni PSC is Hunt Oil Middle East with a 60% interest and Komet Group will retain a 20% interest.

The phased development of the assets include Afren and partners initially focusing on light oil reservoirs expected to deliver 75,000 net barrels of oil per day net to Afren within five years from Barda Rash alone. The company plans an active drilling campaign from 2011 to 2012.

Afren will fund the deal with a US$200-million corporate credit facility led by BNP Paribas and VTB Capital with the balance to be funded by a combination of equity financing, existing cash resources and cash flows from existing operations.