Afren completes acquisitions

Oil producer Afren has completed the acquisition of interests in two assets in Kurdistan after sorting out a $200m loan facility.As flagged back in July, Afren has bought a 60% participating interest in the Barda Rash production sharing contract (PSC) and a 20% participating interest in the Ain Sifni PSC, located in the Kurdistan region of Iraq. The $200m corporate credit facility runs for 18 months, with quarterly repayments kicking off six-months after the funds are drawn down. In total, the acquisition cost $588.25m, $388.25m of which is due on completion and $200m in six months, which will be funded using both existing resources and cash. The firm plans to concentrate on phased development which will initially focus on light oil reservoirs, which it expects will deliver 75,000 barrels of oil per day within a five year period. Osman Shahenshah, chief executive of Afren, said: "The acquisition covers the full E&P [exploration and production] spectrum of development, appraisal and low risk exploration upside and is consistent with Afren's strategy of acquiring low cost barrels in areas of strategic advantage. "The acquisition increases Afren's current 2P [proved and probable] and 2C [contingent] recoverable reserves base by over 700% at a cost of under $1 per barrel."NR