Afren has entered into a Joint Venture Agreement ("JVA") with Oriental Energy Resources Limited and Energy Equity Resources ("EER") for participation in the exploration, appraisal and development of OML 115 offshore South East Nigeria, adjoining the Ebok and Okwok development area.
Under the terms of the farm-in agreement with EER, Afren as Technical Advisor will acquire a 32.5 percent legal interest. The effective economic interest of between 77 and 100 percent reverts to between 81.25 and 65 percent (post cost recovery associated with the initial exploration work program). Following cost recovery by both Afren and EER, Afren's effective economic interest will revert to between 32.5 and 40.625 percent of field revenues. Afren has undertaken to fund the drilling of one exploration well, after which Afren and EER will jointly fund costs pro-rata (81.25 percent and 18.75 percent respectively).
Following the farm-in to develop the nearby Ebok Field with Oriental in March 2008, Afren had entered into a collaborative agreement with Oriental to pursue other assets in the region. Afren subsequently farmed-in to the Okwok field in August 2009 and OML 115 represents another important milestone within the collaboration agreement. OML 115 benefits from the Nigerian Royalty Tax Fiscal terms.
OML 115 is in the translational structural setting of the prolific offshore eastern Niger Delta, surrounding the Afren - Oriental operated Ebok and Okwok development area and close to the giant Zafiro Complex. The southern portion of the Okwok structure (Okwok South) extends into OML 115 and significant additional prospectivity has been defined within the channelized Qua Iboe system. Afren estimates gross unrisked resource potential of 270 mmbbls based on prospectivity defined to date.
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