Afren Shares Up on Trading Statement

By John Lee.

Afren plc's trading statement and operations update includes the following review of its activities in Iraqi Kurdistan. Shares in the company closed up 2.7 percent:

Barda Rash

Having commenced an extensive testing programme at the BR-1 well in July 2012 and establishing oil rates in excess of 6,000 bopd of 28° to 32° API oil, as well as obtaining valuable information on the production characteristics of the Mus/Adiayah reservoir, the Company initiated production in August 2012 and has produced its first cargo of sales specification oil to tank.

Initial storage capacity limits during the early phases of start-up at the field led the Company to restrict flow-to-tank from the well to approximately 18,800 barrels as at end 2012. The work-over and testing operations on the existing Barda Rash well-stock is continuing.

The Viking I-10 rig has also been contracted to commence the first of two new wells to be drilled on the block by Afren which will target additional prospectivity while also enhancing the production capacity of the field.

Ain Sifni

On 17 April 2012, the Company announced that the Simrit-2 exploration well had successfully encountered an estimated 1,342 ft of net oil pay in Cretaceous, Jurassic and Triassic age reservoirs. The well was initially drilled to its prognosed total measured depth of 12,139 ft but was subsequently deepened to a revised total depth of 12,467 ft to test additional zones of prospectivity.

The Partners completed drilling on the Simrit-2 exploration well in July 2012. The objective of the well was to test the western extent of the Simrit aniticline, a large scale east to west trending structure located on the northern part of the Ain Sifni PSC. Analysis of data collected over the deepened section of well indicated the continual presence of light oil shows, and extended the estimated net oil pay encountered by the well to 1,509 ft throughout Cretaceous, Jurassic and Triassic age reservoirs. No oil water contact was encountered in the target reservoirs.

Following the conclusion of drilling operations at Simrit-2, a comprehensive well test programme was undertaken. The Partners intend to undertake up to 12 separate drill stem tests ("DSTs") in total, and announced on 26 July 2012 that the first batch of three DSTs in the Triassic age Kurra Chine formation had yielded an aggregate flow rate of 13,584 bopd of 39° API oil. Operator Hunt Oil Middle East ("Hunt Oil") has re-commenced testing operations after an extensive rig acceptance process for the Hitech-3 rig.

On 12 September 2012, Afren announced that exploration drilling had commenced at the East Simrit prospect (Simrit-3 well). The Simrit-3 well is located approximately 10 km east of the successful Simrit-2 discovery well, and is exploring the eastern extent of the large scale Simrit anticline. The operator Hunt Oil is planning to drill a further three exploration wells in 2013.

Commenting today, Osman Shahenshah (pictured), Chief Executive of Afren plc, said:

"2012 saw record production and financial performance combined with significant exploration success in Nigeria and the Kurdistan region of Iraq. In 2013 we expect to further grow our reserves base through a multi-well exploration and appraisal drilling campaign in both established and new basins, while continuing to grow our production base. 

"We are financially well positioned with robust cash flows, a strong balance sheet and the necessary financial capacity and flexibility to optimally explore and develop our high quality portfolio of growth opportunities well into the future.  There is much to look forward to in 2013 and beyond."

(Source: Afren)

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