Afren (Presentation) - Proactive Investors

Canaccord Adams Global Energy Conference 

BEYOND FIRST OIL 

24 October 2007

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www.Afren.com - October 2007 

2

Agenda 

◦ A unique African proposition 

◦ Production growth 

◦ Reserves growth 

◦ Conclusions 


3

A Divider unique Slide African proposition

The Premier African E&P Independent 

NIGERIA 

◦ Management team with 

extensive African experience 

◦ Initial strategic focus on West 

Africa 

SAÕ TOMÉ & PRINCÍPE JDZ 

GABON 

CONGO 

◦ Visible production growth 

profile 

◦ Material high impact reserve 

growth 

ANGOLA 

◦ Strong financial resources 


5

Extensive African / industry experience 

Board 

Dr Rilwanu Lukman - Chairman 

Guy Pas 

Non exec 

Evert Jan Mulder 

COO 

Osman Shahenshah 

Chief Executive 

Egbert Imomoh 

Chairman Afren Nigeria 

Peter Bingham 

Non exec 

John St. John 

INTERNATIONAL ADVISORY BOARD 

Ennio 

Sganzerla 

Bert Cooper 

Founder 

Brian 

Ward 

MANAGEMENT 

Nick Johnson 

Expl. & New Ventures 

Alan Hunt 

Okoro Setu Project 

Constantine Ogunbiyi 

Afren Nigeria / Counsel 

Assoc Director 

Galib Virani 

Acquisitions / IR 

Jeremy Whitlock 

Financial Controller 


6

A track record of delivery 

Afren Share Price (p/sh) 

90 

85 

80 

75 

70 

65 

60 

55 

50 

45 

40 

Afren 

AIM All Share 

AIM Oil and Gas Index 

◦ Listed on 14 March 2005 on London Stock Exchange 

(AIM) 

◦ Ticker – AFR.L 

◦ 273 mm shares in issue (385 mm fully diluted) 

◦ Market capitilisation: US$470 mm (2) 

1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 

Growing Reserves & Resources base 

◦ Okoro Setu 2P reserves 

◦ 32mmbbl (NSAI certified) 

◦ 42mmbbl (FDP approved) 

◦ Unrisked prospective resources: 120mmbbl 

Material growth from existing portfolio 

◦ Gross production: 15-20,000bopd (mid 2008) 

◦ 2008 Revenue (1) : US$340 mm 

◦ 2008 EBITDA (1) : US$240 mm 

Strong financial position 

◦ Cash balance: US$96.1 mm (H1 2007) 

◦ US$500 mm raised in debt and equity since 

inception 

Significant upside 

◦ Active New Ventures pipeline 

◦ Exploration portfolio: over 25 identified leads / 

prospects 


Note: (1) Afren internal estimates (at US$50 price deck). (2) Market data as at close on 18 October 2007, 

source Datastream 

7

Initial focus on West Africa 

Highest growth in proved reserves… 

… with significant reserves in West Africa 

Africa 

Proved Oil Reserves 

Total: 50 billion barrels 

Proved Gas Reserves 

Total: 219 Tcf 

Europe 

Middle East 

South America 

77% 

81% 

Asia Pacific 

North America 

-50% 0% 50% 100% 150% 

Note : Growth over 1985 to 2005 period 

18% 

Nigeria Angola Equatorial Guinea Congo Gabon 

◦ High margin barrels 

◦ Established oil industry / infrastructure 

◦ Gas commercialisation in infancy 

◦ Most prospective accessible exploration province in world 

◦ 30 bboe to be discovered in Nigeria (16 bboe onshore) 

◦ Majors – mature onshore position 

◦ Proved fields overlooked / undeveloped by Majors 


8 

Source : Waterous & Co, OPEC Annual Statistical Bulletin 2003, BP Statistical Review of World Energy

Rapid portfolio expansion 

Ofa 

Eremor 

Ogedeh 

1 

2 

3 

2 

NIGERIA 

1 

3 4,5 

CAMEROON 

◦ Q1 05: 

◦ Q1 05: 

◦ Q2 05: 

IPO on LSE 

JDZ Block 1, Nigeria-São Tomé & 

Príncipe 

Iris and Themis Marin blocks and 

Ibekelia Licence Area, Gabon 

Okoro Setu 

Iris Marin,Themis 

Marin & Ibekelia 

4,5 

6,7,8 

9 

Eq. G 

◦ Q3 05: 

◦ Q2 06: 

◦ Q2 06: 

Ogedeh field, Nigeria 

Okoro and Setu fields, Nigeria 

La Noumbi, Congo (Brazzaville) 

Block 1 JDZ 

9 

GABON 

◦ Q4 06: Cabinda Central Licence Block B, 

Angola * 

La Noumbi 

Cabinda B 

10 

11 

6,7,8 

10 

11 

CONGO 

◦ Q4 06: 

◦ Q2 07: 

◦ Q3 07: 

Increase in Ibekelia, Gabon 

Ofa field, Nigeria 

Eremor field, Nigeria 

Near term development 

Low cost exploration 

High impact exploration 

Source: Afren. Note * HoA signed 


9

Material high impact reserve growth 

Development projects 

Exploration 

2P Reserves 

3P Reserves 

Contingent Resources 

High impact 

Low cost 

Recoverable reserves 

◦ 2P NSAI certified: 32mmbbl 

◦ 2P FDP approved: 42 mmbbl 

◦ 10-year average reserve life 

Net Prospective Resources 

◦ 120 mmboe unrisked 

Source: NSAI, Afren 


10

Production growth forecast 

90 

80 

Afren 2P 

Appraisal Projects 

New Ventures 

70 

60 

'000b/d 

50 

40 

30 

20 

10 

0 

2008 2009 2010 2011 2012 2013 

◦ 15 – 20,000 bopd by mid 2008 

◦ Exploration and development upside in current portfolio 

◦ Strong New Ventures pipeline 

Source: Afren; indicative projections based on internal targets 


11

Strong financial resources 

2008 capital budget 

Capital structure 

◦ Strong balance sheet (US$ 96.1 mm net cash) 

◦ US$200 mm non-recourse debt facility secured 

◦ Minimal hedging policy 

Share ownership 

Wellington Management: 21.3 mm (8%) 

Development 

Exploration 

New Ventures 

73% 

11% 

15% 

Other 

free 

float 

Lansdowne Partners: 15.3 mm (6%) 

UBS: 12.7 mm (5%) 

JP Morgan: 11.0 mm (4%) 

Management & Directors: 10.7 mm (4%) 

Investec Asset mgt.: 10.6 mm (4%) 

IFC: 8.4 mm (3%) 

Dresdner: 9.4 mm (4%) 

Standard Bank: 9.0 mm (3%) 


Source: Afren. Net cash position as at 30 June 2007. Share ownership as at 30 September 2007 

12

Production Divider Slide growth

Nigeria: near term development 

Asset summary 

Production Peak (1) Local 

Start-up ‘000 bopd Partner 

Ogedeh 

Eremor 

N I G E R I A 

Ofa 

Okoro Setu 

Okoro Setu 2008 15-20 Amni 

Eremor 2008 4-5 Excel 

Ofa 2008 2-3 IEL 

Ogedeh 2009 4-5 Bicta 

Okoro Setu development 

◦ Five-well development (Adriatic VI) 

◦ FPSO secured (Armada Perkassa) 

◦ Drilling to commence end 2007 

◦ First oil early 2008 

Appraisal / development 

◦ Re-entry of Ofa-1 

◦ Completion of Eremor-1 and tie-back 

◦ Ogedeh development options under 

review 


14 

Source: Google Earth. Note (1) : Afren estimates

Okoro Setu: background 

3D view of Okoro reservoir sands 

N 

1000 m. 

Okoro-1 Okoro-3,3ST Okoro-2 

3ST 

Oil water 

contacts 

◦ Two hydrocarbon bearing zones 

◦ 22°API low GOR crude 

◦ Development drilling from Q4 

2007 

◦ In-place volumes (2P): 115 

mmbbls (NSAI) 

◦ Recovery Factor of analogous 

fields: 45% – 50% 

Okoro Setu reserves 

mmboe 1P 2P 3P 

Approved FDP case 30 42 58 

Exploration / appraisal history 

Date Well name Well type Operator Result 

Jul-73 Okoro -1 Exploration Japan Petroleum Oil 

Nov-74 Okoro -2 Appraisal Japan Petroleum Water wet 

May-02 Setu -1 Exploration Amni International Oil & gas 

Aug-02 Setu -2 Appraisal Amni International Water wet 

Sep-06 Okoro -3 Appraisal Afren (as tech. serv. provider) Oil 

Dec-06 Okoro -3 ST Appraisal Afren (as tech. serv. provider) Oil 


15

Okoro Setu: FDP approved 

◦ Water depth of 50 ft 

◦ 12km offshore 

Setu 

◦ Initial development plan - 

5 high angle wells 

Okoro 

Wellhead platform 

3 Phase Production Flowline 

Export Tanker 

◦ Gravel pack completions 

for sand control 

◦ FPSO moored 1km south 

of field for crude 

processing 

3 Phase Test Flowline 

Gas Lift Flowline 

FPSO 

With Gas Lift 


16 

Source: Afren

Okoro Setu: success breeds success 

Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 

Q2 08 

Agreement with Amni 

Rig contract for development 

drilling secured 

Appraisal drilling 

RBL facility / certified reserves 

FDP approval 

FPSO secured 

Long lead items 

Development drilling 

First oil 

Peak production 

Complete 

In progress 


17 


Okoro Setu: Adriatic VI drilling rig contracted 

GSF Adriatic VI rig contracted Drill schedule (1) 

◦ Jack-up 

◦ Cote d’Ivoire (Foxtrot) 

◦ 300 ft water depth 

◦ Gabon (Themis Marin) 

◦ 25,000 ft drilling depth 

◦ Nigeria (Okoro) 


18 

Source: Global Santa Fe. Note: (1) as at 19/10/07

Okoro Setu: FPSO secured 

Armada Perkassa 

◦ 360,000 barrels storage capacity 

◦ 27,000 b/d processing capacity 

◦ 5-year lease with option to extend 

◦ Upgrade: process facilities, test separators, 

process controls, etc. 


19 

Source: Bumi Armada

Okoro Setu: well head platform 

◦ Drilling template complete 

◦ Decks commencing fabrication 

Well Head Platform Schematic 

Drilling template 


20

Okoro Setu: community relations 

◦ Pro-active within local community - early engagement 

◦ Established Community Relations Committee 

◦ Active recruitment from within Local Community 

- FPSO, drilling rig, etc 

Okoro Community 

development program 

Close Co-ordination 

Micro 

credit system 

12% 

Core/admin costs 

16% 

Okoro project 

scholarships 

8% 

Afren/Amni 

Feasibility study 

Portable water 

Projects 

2% 

Local Government 

Representative 

COMMUNITY 

RELATIONS 

COMMITTEE 

Okoro Community 

Dev. Foundation 

Traditional Ruler 

Representative 

Health 

Centre 

24% 

Feasibility study 

of local jetty 

2% 

Vocational training 

36% 


21 


Marginal field strategy: overview 

◦ Indigenous partner 

◦ Afren provides capital and 

technical expertise 

◦ Exploration / appraisal history 

(well defined structures) 

◦ Low cost entry 

Eremor 

Ogedeh 

Ofa 

◦ Low development costs 

(recovered) 

◦ Incremental reserves, production, 

cash-flow 

◦ Upside development potential 

◦ Quick turn-around 

appraisal development production 

Area of 

Interest 


22 

Source: IHS Energy

Marginal field strategy: Eremor development 

D3 Sand Depth structure map 

EREMOR-3 

EREMOR-4 

Exploration / appraisal 

Date Well Type Operator Result 

1978 Eremor-1 Exploration Shell Oil 

1984 Eremor-2 Appraisal Shell Water wet 

1984 Eremor-3 Appraisal Shell Oil 

1990 Eremor-4 Appraisal Shell Water wet 

2005 Eremor-1re Appraisal Excel Oil 

EREMOR-2 

EREMOR-1 

◦ Covered by 3D seismic 

◦ Five hydrocarbon bearing zones 

◦ Recovery Factor: 20 – 40% 

2kms 

Eremor resources 

mmboe STOIIP Recoverable 

30 10 

◦ Good oil samples of low GOR, 20 0 degree 

API 

◦ Phase-1 FDP approved 

- Re-complete existing well and tie-back to 

existing infrastructure 


23 


Reserve Divider Slide growth

Exploration portfolio - summary 

NIGERIA 

Country 

W.I. (%) 

Gross unrisked 

Resources 

mmbbl 

Net unrisked 

Resources 

mmbbl 

Nigeria-Sao Tome JDZ 

Block 1 4.41% 1,000 

44 

CAMEROON 

Gabon 

Themis Marin 12.86% 100 

Iris Marin 12.86% 100 

Ibekelia 20.00% 40 

13 

13 

8 

Congo (Brazz) 

Block 1 JDZ 

Iris Marin,Themis 

Marin & Ibekelia 

1 

2 

1 

2 

Eq. G 

GABON 

La Noumbi 14.00% 225 

32 

Angola 

*Cabinda Central Block B 5.00% 250 13 

1,710 123 

La Noumbi 

3 

Cabinda B 

4 

3 

4 

CONGO 


25 

Source: Afren, HOA signed in Angola

Conclusions 

Divider Slide

2007/08 key objectives 

Achieved 

Okoro Setu Development 

Field Development Plan – Gov’t approval 

FPSO contract 

Debt facility, certified reserves 

Development drilling (5 well program) 

First oil 

Marginal Fields Development 

Ofa well test 

Development planning 

Development drilling 

First Oil 

Exploration 

Congo - La Noumbi seismic & exploration well 

Gabon – Themis exploration well 

New Ventures 

Additional Nigerian undeveloped reserves 

Asset acquisitions in West Africa 

1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 

Complete 

In progress 

Source: Company 


27

The Premier African E&P Independent 

The management team to deliver new African oil 

◦ Preferential access, delivery and execution 

◦ Track record: 11 assets in 5 countries 

Strong production growth profile 

◦ 15-20,000 bopd by mid 2008 

Material high impact reserves growth 

◦ NSAI 2P certified (32 mmbbl); FDP (42 mmbbl) 

◦ 120 mmbbl unrisked resources 

Strong financial position 

◦ US$96.1 mm net cash 

◦ US$200 mm non-recourse debt facility 


28

Appendix Divider Slide

Background 

Founded in late 2004 

◦ Team including Dr Rilwanu Lukman (Chairman) and Osman 

Shahenshah (Chief Executive) 

Trading 

◦ Listed on 14 March 2005 on London Stock Exchange (AIM) 

◦ Ticker – AFR.L 

◦ 273 mm shares in issue (385 mm fully diluted) 

◦ Market capitilisation: US$470 mm (1) 

Presence 

◦ Offices in London and Lagos 

◦ Assets in Nigeria, Congo Brazzaville, Gabon, Angola, São Tomé & 

Príncipe 


30 

(1) Market data as at close on 18 October 2007

Executive management 

Osman Shahenshah 

Chief Executive 

◦ 20 years experience of oil and gas 

finance 

◦ One of the founders of Afren 

◦ International career began with 

Credit Suisse First Boston 

◦ Senior positions in the oil and gas 

finance groups of the 

International Finance Corporation 

(private sector arm of the World 

Bank), and the investment 

banking divisions of Dresdner 

Kleinwort Wasserstein and 

Mediocredito Centrale 

◦ More than 15 years experience in 

the African Oil & Gas sector 

working with Shell, Chevron, 

Total, ENI and Nigerian National 

Petroleum Corporation 

◦ PhD from University of 

Pennsylvania, MSc from Columbia 

University and a BA from Brown 

University 

Evert Jan Mulder 

Chief Operating Officer 

◦ Over 25 years industry experience 

◦ Addax, Shell, Weatherford and 

Halliburton 

◦ Over 13 years experience in Nigeria 

◦ Most recently COO of Addax, 

Nigeria’s largest independent oil 

producer 

◦ Responsible for increasing 

production from 30,000 bopd to 

75,000 bopd in 24 months, while 

maintaining reserves at Addax 

◦ Over 10 years with Shell (Head of 

Commercial Planning in Nigeria and 

Head of Production Technology for 

Shell Expro) 

◦ Formerly Business Development 

Manager and the Global Manager of 

Reservoir Description for 

Halliburton 

◦ MSc in mining engineering from the 

Technical University of Delft, 

Netherlands 

Egbert Imomoh 

Exec. Chairman, Afren Nigeria 

◦ 36 years experience with Shell in 

Nigeria, UK and Netherlands 

◦ Formerly Deputy Managing 

Director of Shell Petroleum 

Development Company (Nigeria) 

("SPDC") producing 1 mm bopd 

◦ Held various senior positions 

throughout the Shell group from 

Chief Petroleum Engineer in 

SPDC, Technical and Planning 

Manager to Deputy MD of SPDC 

◦ Member of the Society of 

Petroleum Engineers and has 

served on the SPE board as 

regional Director for Africa 

◦ BSc in Mechanical Engineering 

from Birmingham University 


31

Okoro Setu development – location map 

Setu 

Okoro 

Area of 

Interest 


32 

Source: IHS Energy, Afren

Nigeria: Ogedeh development 



1993 Ogedeh-1 Exploration Chevron Oil 

◦ Two oil bearing ‘A’ and ‘D’ sands 


◦ Certified resources up to 15 mmbbls 

(Senergy) 

◦ Low cost development 

◦ Close to existing infrastructure 

◦ Joint development options under 

consideration 


33 

Source: IHS Energy, Afren

Nigeria: Ofa development 



1970 Ofa-1 Exploration Shell Oil 

1998 Ofa-2 Exploration Shell Gas condensate 

Ofa-1 Well 

Location 


◦ 8 oil-bearing zones @ 6,670 and 

7,280 feet 

◦ STOIIP of 75 to 150mmbbl 

(Gaffney, Cline & Associates) 

◦ Low-cost entry and development 

◦ Tie-back to nearby infrastructure 

◦ Re-entry well completed: August 

2007 

Area of 

Interest 

Source: IHS Energy 


34

Congo: La Noumbi - high impact exploration 

Doungou 

La Noumbi 

Cabinda ‘B’ 

Nanga 

Area of 

Interest 

◦ High impact exploration – adjacent to 

M’Boundi 

◦ Vandji play on trend through to La 

Noumbi 

◦ Afren 14% interest 

◦ Operator Maurel et Prom (48.5%) and 

partner Burren (37.5%) 

◦ 912 km of recently acquired 2D seismic, 

now being processed 

◦ Doungou well completed in October 2007 

- Working hydro-carbon system 

established in Djeno and Vandji 

Formations 

◦ Active drilling programme 2008 

◦ Unrisked EUR: 225 mmbbls 

Source: IHS Energy, Afren 


35

Angola: Cabinda Block B – high impact exploration 

◦ Strategic Angola entry 

Area of 

Interest 

◦ HoA with GER for 5% interest 

◦ Multiple reservoir targets. On trend 

with M'Boundi (Vandji play) 

◦ 32 wells (1957-1971) without 

seismic data; 4 wells tested light oil 

(1,000 bopd) and 7 wells with oil 

shows 

◦ Force Majeure expected to be lifted 

in 2007 


Cabinda ‘B’ 

Source: IHS Energy, Company 


36

Gabon: low cost exploration 

Area of 

Interest 

◦ 12.86% interest in Themis and Iris 

Marin 

◦ 20% interest in Ibekelia Study Area 

◦ Operated by Sterling Energy with 

partners Petro SA, Addax and Premier 

◦ Admiral prospect in Themis Marin to be 

drilled Q4 2007 

◦ Charlie prospect in Iris Marin to be 

drilled in 2008 

◦ Many other prospects/leads identified 




37

JDZ block 1: high impact exploration 

Area of 

Interest 

◦ Obo -1 discovery in 2006 proved 

JDZ as a significant oil and gas 

province 

◦ Block 1 technical studies ongoing 

prior to further drilling 

◦ On trend with Nigerian deep water 

world-class oil fields 

~500 million bbls 

~1 billion bbls 

Obo-1 

- Akpo and Egina (Total): 1,500 

mmbbl 

◦ Block 1 gross potential estimated 

at circa 1 billion bbl 

◦ Multi firm well programme on 

Blocks 2, 3 and 4 from 2008 

Exploration drilling 

2008 

Block 1 

Chevron (45.9%) 

Addax (40%) 

Sasol (5.1%) 

Dangote (4.49%) 

Afren (4.41%) 



38

Afren (Presentation) - Proactive Investors

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