Afren (AIM: AFR) acquired two additional interests in exploration blocks in Angola and Ghana from Devon Energy. Afren will gain a 95% working interest and operatorship of the Keta Block, offshore Ghana, and a 15% working interest in Block 16, Angola.
Devon Energy had already identified targets in the Upper Cretaceious zones on the Keta Block. Afren will be committed to drilling a well before the end of 2008, but will first complete an evaluation of the seismic data. Afren said the 'mean potential reserves' are expected to be between 250-500 million barrels of oil equivalent. The first well will be drilled on the Cuda prospect which had already been covered by 'good quality' 3D seismic data.
Block 16 in Angola is also considered to be highly prospective with a number of discoveries in the area. The mean potential reserves are expected to be approximately 1 billion barrels of oil equivalent.
Osman Shahenshah, Chief Executive of Afren, commented:
'We are delighted to have secured two highly prospective exploration blocks in Ghana and Angola offering multi-billion barrel oil resource potential. The Keta Block, offshore Ghana, is located east of the discoveries that were recently announced on the West Cape Three Points and Deepwater Tano blocks, whilst Angola Block 16 lies adjacent and on trend to 45 significant discoveries and notably
has two existing discoveries, which are under appraisal and offer the potential for early development. The addition of the Keta Block and Block 16 to the portfolio will further increase the Company's exploration and appraisal drilling campaign for 2008, with a total of up to 4 additional wells.'
Merrill Lynch reiterated its buy recommendation and increased the Net Asset Value of Afren by 9 pence to 89 pence.