AFR.L Regulatory News (AFR)

11 Jun 2009 11:00



Afren plc (AIM: AFR)

Annual General Meeting - Chairman's Statement

London, 11th June 2009 - At today's AGM the Chairman, Egbert Imomoh, opened the meeting with the following statement:

The year 2008 and the first half of 2009 has been a period of strong operational delivery and continued portfolio expansion for Afren. In Nigeria we achieved First Oil from the Okoro Setu project and also completed the farm-in and successful appraisal of the Ebok field; concluded in February 2009, the Ebok-4 well confirmed a material 52 mmbbls oil development with upside potential to 106 mmbbls. We expect an early Phase 1 development of Ebok to deliver production of 15,000 bopd within the first half of 2010, with a full field development Phase 2 subsequently increasing production to over 35,000 bopd.

Elsewhere, we completed the acquisition of Devon Energy's assets in Côte d'Ivoire, delivering immediate upstream production at Block CI-11, full ownership of the Lion Gas Plant as well as appraisal and development upside at Block CI-01.

I am delighted to say that we have, to date, built a diversified portfolio of exploration, appraisal and development assets across six African countries. Today, the Company is partnered with five indigenous companies in Nigeria and the national oil companies of Côte d'Ivoire and Ghana. In 2008, the Company also entered into a strategic partnership with Sojitz Corporation to jointly pursue acquisitions of scale in Africa. In little over four years since inception, Afren has established itself as a significant producer and is now producing approximately 26,000 boepd from two African countries in upstream and midstream operations. This has been achieved whilst maintaining a strong environmental, health and safety record, conducting our business in both an operational and socially responsible manner.

Our exploration drilling this year will be focused on Congo Brazzaville, where we will be drilling the "Tie-Tie Updip" exploration well with our partners Maurel et prom and ENI.

Financially, we are in a robust position. In 2008 we raised approximately US$450 million, through a combination of debt, equity and loan notes. We also completed a heavily oversubscribed equity placing in April 2009, raising a gross sum of US$126 million. Together with existing cashflow from operations we have the financial capacity and flexibility to fund the Company through its intended work programme and in particular the fast-track development of the Ebok field. We also remain focused on maintaining strict capital discipline and will continue to follow through on our cost deflation initiatives, which have already shown encouraging signs, and plan appropriately in line with the current economic environment. The Company has also commenced the process towards an application for the primary listing of our ordinary shares on the Official List and to trading on the London Stock Exchange's main market. 

We have been able to continue on our growth trajectory by adherence to a clear and differentiated strategy, which is to maintain our pure play African geographical focus, benefiting from a wealth of African expertise and experience in the Board and Management whilst partnering with indigenous companies, governments and national oil companies. We are also actively engaged in finding commercial solutions to the vast untapped gas resources in the Gulf of Guinea.

Finally, I would like to thank Guy Pas for his significant contributions to the Board and Company, who will be stepping down from the Board following the AGM to pursue personal projects. It has been an honour to work closely with Guy. He has brought a wealth of experience and leadership to the Company. I remain extremely excited about Afren's future, and have no doubt that the Company's management team will continue to deliver materially value accretive opportunities for its shareholders and further build upon the solid platform that has been established over the past four years.

-Ends-

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