AFR.L Regulatory News (AFR)

Afren plc (AFR LN)

Acquisition of an additional interest in First Hydrocarbon Nigeria

London, Friday 5th July 2013 - Afren plc ("Afren" or the "Company") announces that following the recent shareholder approval on the recommended acquisition of a 10.4 per cent. interest in First Hydrocarbon Nigeria ("FHN"), it is pleased to confirm the acquisition of an additional 23.3 per cent. beneficial interest in FHN.

The acquisition of an additional 33,966,333 shares, representing approximately 23.3 per cent. of the outstanding share capital of FHN, from a combination of Capital Alliance Energy Nigeria Limited ("CAPE"), Earl Act Global Investments Limited and other FHN shareholders (excluding any related parties), has been undertaken at an average price of US$3.10 per share in cash (the "Further Acquisition"). Of the total consideration (US$105.4 million) for the Further Acquisition, US$22 million is payable on the first anniversary and US$22 million on the second anniversary of the acquisition date, in each case to CAPE.

Afren has also entered into a Put/Call option with Earl Act Global Investments Limited for a further 18,299,993 million FHN shares (representing a further 12.5 per cent. of the outstanding share capital of FHN) at a price of US$3.32 per share. These options may only be exercised after 24 months and for a period of 6 months thereafter.

In addition, as separately announced, all Afren PDMR holdings in FHN have been sold to CSL Stockbrokers (Nigeria), and the Afren PDMRs have undertaken to use the net proceeds to acquire Afren shares in the public markets.

FHN has a 45 per cent. interest in the OML 26 portfolio of assets onshore Nigeria. The portfolio of assets holds two producing fields (Ogini and Isoko), with 2P oil reserves estimated at 134.6 mmboe and gross contingent resources estimated at 68.0 mmboe as at 31 December 2012, independently certified by Netherland Sewell & Associates International, and three proven but undeveloped fields (Aboh, Ovo and Ozoro), with gross contingent resources estimated at 144 mmboe and a further 615 mmboe of gross unrisked prospective resources on the block across multiple prospects.

The current forward work programme for FHN is expected to increase production from Ogini and Isoko to more than 40,000 bopd through a phased development process by 2015 and ultimately take production to 50,000 bopd. In addition, preparatory work is on-going for the appraisal programme on the proved but undeveloped fields and exploration of the significant undrilled upside potential on the block.

Osman Shahenshah, Chief Executive of Afren, commented: 

"As previously highlighted, we are delighted to be increasing our indirect beneficial ownership of OML 26 onshore Nigeria and further simplifying the FHN shareholder base. Since FHN's acquisition of a 45% interest in the OML 26 portfolio of assets, 2P reserves have increased by 231% to 134.6 million barrels, with significant undrilled upside remaining. The additional acquisition is significantly accretive to our shareholders and we look forward to working closely with NPDC to further increase production and undertake an extensive appraisal and exploration programme on the portfolio."

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Notes to Editors

First Hydrocarbon Nigeria ("FHN")

FHN was established in June 2009 in direct response to the Nigerian government's policy to increase indigenous participation in the Nigerian upstream oil and gas sector and its commitment to deepening indigenous involvement in the sector at all levels. In December 2011, FHN acquired a 45% interest in the OML 26 portfolio of assets in Nigeria from Shell Petroleum Development Company of Nigeria, Total E&P Nigeria and Nigeria Agip Oil Company. The OML 26 portfolio of assets holds two producing fields (Ogini and Isoko), with 2P oil reserves estimated at 134.6 mmboe and gross contingent resources estimated at 68.0 mmboe as at 31 December 2012, according to a technical expert's report prepared for FHN by Netherland Sewell & Associates International, and three proven but undeveloped fields (Aboh, Ovo and Ozoro), with gross contingent resources estimated at 144 mmboe and a further 615 mmboe of gross unrisked prospective resources on the block across multiple prospects. In 2012 gross average production from the Ogini and Isoko field totalled 6,010 bopd, of which 1,217 bopd were attributed to Afren, with current gross production from the Ogini and Isoko field of approximately 6,150 bopd. FHN generated US$112.4 million in revenue, incurring a loss of approximately US$14.8 million. The net revenues and loss attributable to the Further Acquisition in respect of 2012 were approximately US$25.9 million and US$3.4 million respectively.

Afren plc

Afren is an independent upstream oil and gas exploration and production company listed on the main market of the London Stock Exchange and a constituent of the Financial Times Stock Exchange Index of the leading 250 UK listed companies. Afren has a portfolio of assets spanning the full cycle E&P value chain. Afren is currently producing from its assets in Nigeria, Côte d'Ivoire and the Kurdistan region of Iraq and holds further exploration interests in Ghana, Nigeria, Côte d'Ivoire, the Kurdistan region of Iraq, Congo Brazzaville, the Joint Development Zone of Nigeria - São Tomé & Príncipe, Kenya, Ethiopia, Madagascar, Seychelles, Tanzania and South Africa. For more information please refer to www.afren.com.

"PDMR" - Persons Discharging Management Responsibility