Offshore staff

LONDON -- Afren Plc. has entered into a financing and technical services agreement with Excel Exploration & Production Ltd. to develop the Eremor field offshore Nigeria.

Under the agreement, Afren will be responsible for financing Phase 1 of the field development plan and will initially recover the investment from 90% of net field revenues. Following cost recovery, Afren and Excel will equally share production revenue and costs.

Eremor, an undeveloped oil field in shallow-water block OML 46 is close to existing infrastructure and within 12 km (7.5 mi) of a number of Shell producing fields.

Shell discovered the field with exploration well Eremor-1 in 1978, encountering five hydrocarbon bearing zones. Eremor-1 currently is suspended and suitable for re-completion.

Phase-1 of the field development plan includes completing the existing well and constructing a 7-km (4-mi) oil evacuation line to the nearest flow station. The field development plan and environmental impact assessment have been approved. Development work will begin in the near term, Afren says.

"I am delighted to announce Afren's fourth partnership with a well established indigenous company in Nigeria, which underpins Afren's commitment and strong competitive position to develop relatively low-risk fields with significant near-term upside that provide early cash flow and add to our growing reserve base," says Osman Shahenshah, chief executive of Afren. "This follows the recent announcement of a farm-in agreement with Independent Energy for participation in the Ofa field and takes Afren's portfolio to 11 assets in five countries."

Excel was awarded 100% interest and operatorship of Eremor under the federal government of Nigeria's marginal field program. A 3D seismic survey indicates the field contains in-place volumes of up to 30 MMbbl of oil in the D3.0 reservoir, with a similar potential upside in the shallower D1.0 reservoir. Recoverable reserves from the D3.0 reservoir are estimated at 10 MMbbl.

6/18/2007