Amities . l have been discreetly buying this stock since it was 39p . And the more i learn the bolder are the positions i take . .....Floated in Dec 2004 it was oversubscribed and before costs the required $15 million was raised. At the helm is ex BP head of Global exploration and Resavoir management . Furthermore a success story at Global Expo . Now Nick Johnstone wants to set up on his own . And after speaking to him l am not at all surprised . He is like a "Who s Who " of the hydrocarbon world ...He has ALL the prerequisites for success so why work for some other lackey ! .. namely connections from his ertwhistle employers . He has assembled a first class management team from ex colleauges at BP ; and is his business model is simple . AFR farms in on "Big Oils " inception upstream ; and with its scale of economy it works closely with "Big oils" fields on the look out for excellent workovers oppertunities .... Already lt has via a complicated j/v a percentage of the Sao Tome and Principe acreage -Located between the oil rich waters of Nigeria and those of Sao Tome and operated by Texaco / Chevron and Esso; and believed by many to be the new North sea . . 3D Seismic testing and magnetic graphic imagery and satellite imaging has located a labyrinth of channels leading to a main resavoir which is believed to14-15 mmbbls of oil and which would leave AFR with its share of 120/140 million barrels for NO cash outlay .To ensure early cash generation Afren has entered into a production sharing agreement in the developed Ogedeh field { adjacent to the BP operated Olowi marin field which is believed to yield 180 mmbbloe. Furthernore AFR has agreed to drill the lbekelia project for Ascent resources which is expected to produce 2,500 b/pdoe to satisfy AFR percentile share ,ln addition it is a believed resouce of several years . .. , .Not a bad start for a company with little more than six months in the making . ....and well worthy of investigation !! .....@+ J

From HBs Market & Broker Roundup today:

Bridgewell ....says buy Afren (AFR.L).

AFR also mentioned in the FT today: Exploration group Afren rose 1 per cent to 54p on talk it was close to securing government approval to begin exploration at the Okoro field off the coast of Nigeria

IC dated 5 Apr 07

Afren took a further step towards production from its Okoro Setu project in Nigeria after it announced the securing of a $200m debt facility with BNP Paribas. That deal followed on from the successful appraisal of Okoro in the third quarter of last year, in which independent consultant Netherland & Sewell estimated that it contained a proven reserve of 25m barrels, with a further 32m barrels in the probable category.

The plan now is to start development drilling in the third quarter of this year, with peak production of between 15,000 and 20,000 barrels of oil per day expected by early 2008. And with Standard Bank joining BNP Paribas in subscribing for $15m in new equity - at 57p a share - alongside the new debt facility, investors can draw comfort from the presence of some big hitters on the share register.

Broker Jeffries forecasts revenues of 57.5m for 2008 and EPS of 44p, which puts the company on a forward PE ratio of just 1.2


Ord price: 53p Market value: 109m
Touch: 53-54p 12-month High: 87p Low: 41p
Dividend yield: nil PE ratio: na
Net asset value: 14p* Net debt: 60%**
*Includes intangible assets of 44.9m, or 22p a share
**Prior to equity fund-raising in Mar 2007 (see text)


Year to Turnover Pre-tax Earnings Dividend
31 Dec (m) profit (m) per share(p) per share (p)

2005 nil -4.56 -3.6 nil
2006 nil -8.46 -4.4 nil
% change - - - -


Last IC view: Buy, 59.75p, 28 Feb 2007


At their current 53p, the shares are slightly below the level at which we last recommended buying them (59.75p, 28 February 2007). Still, there should be plenty of progress this year, so we continue to rate them a BUY.

kkeith, are you sure that EPS isnt something like 4.4p per share? Evolution only has an EPS of 1.4p pencilled-in for 2008, and on revenues of 57 million earnings of 44p per share is impossible??? Put me right if there's something ive got wrong here!

Chad
This is taken from IC so can only go with these figures but there is some confusion on the EPS with brokers forecasts .
Maybe someone else will be able to shed more light on this

Thanks Keith

Malaysias Bumi Armada is set to land a breakthrough FPSO contract in West Africa.

Nigeria will hold a bidding round for 45 exploration blocks on the 3rd of May

From chevron's website now hold 45.9% down from 51%.


Nigeria S Tome Prcipe Joint
Development Zone (JDZ)
Chevron is the operator of JDZ Block 1 and holds a 45.9 percent
interest following the sale of a 5 percent interest in 2006.
In March 2006, the first exploration well, Obo-1 in JDZ
Block 1, was completed and found hydrocarbons. In 2007,
technical studies are scheduled for continuation to determine
the possible need for additional drilling.

i have a question about the upcoming developments....

they only get about 50% of the profit don't they ?

belisce6 at the moment i can only give figures from Afrens website which you may have seen for the Okoro and Setu Fields.
Hope this helps
Afren signed a Financing and Production Sharing and Technical Services Agreement with Amni for participation in the development of the Okoro Field ("Okoro") and Setu Field ("Setu"), offshore Nigeria.

Under the terms of the Financing and Production Sharing Agreement with Amni, Afren is responsible for all costs incurred in the development of the field and recovers these costs from 90% of production with an 11% uplift on capital. Pre and post cost recovery, Afren receives 50% of profit oil. Afren's Effective Interest is therefore >60%. The fiscal regime is a flat Petroleum Profits Tax of 60% and a sliding scale Royalty from 2.5% to 18.5%.

Thanks Keith

thanks mate.... that is the sort of thing that i saw as well... (obviously cos it's in their announcements).... so effectively they will be getting their capital back first, and then it will go into the 50% of profit stage... looks like a decent ''whack'' of taxes ! 50% of 40% would give them about 20% max. of the pre-tax proftis (??)
Sure hope that the pre-tax profits will be high.......

A nice little rise today some more drilling to start soon so hopefully see a steady climb from here

Todays RNS illustrates that things are begining to get exiting

Good morning TheFrenchConnection , yes indeed!

Production Vessel for Okoro Setu Project

London, 17 April 2007 - Afren plc ('Afren' or 'the Company') and its partner
Amni International Petroleum Development Company ('AMNI') announce the signature
of a contract for a Floating Production Storage and Offloading vessel (FPSO) for
the Okoro Setu Project, offshore Nigeria.



The Boards of Afren and AMNI are pleased to announce the signature of a contract
for an FPSO vessel, the Armada Perkasa, which is the final milestone in ensuring
the Company is positioned to commence production from the Okoro Setu Project in
early 2008.



The Armada Perkasa is owned and operated by Bumi Armada Berhad, a major FPSO
marine operator that is part of the Usaha Tegas group, one of the largest
investment groups in Malaysia. The vessel storage capacity is 360,000 barrels
with a processing capacity of 27,000 barrels per day. The vessel will be leased
to the Okoro Setu project over a fixed 5 year period. The unit will process the
total well fluids, producing stabilised crude for storage in the FPSO, with
subsequent regular off-take by tanker.



Following the successful appraisal drilling programme, completed in December
2006, Afren has put in place the drilling capability, financing structure,
development plan and now the production capacity for the Okoro Setu Project, in
order to achieve its production target of 15,000 - 20,000 barrels per day in
early 2008:



Fully underwritten US$200 million debt facility
Government approval for the Field Development Plan
FPSO contract secured
Development drilling scheduled to commence in Q3 2007 with the Global
Santa Fe Adriatic VI drilling unit contracted for a nine month programme





Osman Shahenshah, Chief Executive of Afren, commented:



'It is testament to the strength of Afren's management and technical team, and
its close working relationship with AMNI, its indigenous partner, that in less
than a year since agreeing its involvement in the project the Company is now
fully prepared and well positioned to commence production from the Okoro Setu
Project in early 2008.



'This announcement represents the final in a series of operational milestones
Afren has set out to achieve in recent months. We now look forward to continued
progress on our new ventures pipeline and starting development drilling in Q3
2007.'

Good morning seawallwalker another piece of the jigsaw now in place

From the Oil Barrel 18/04/2007


Afren Signs FPSO Contract And Is Ready To Roll At Okoro Setu
With the signing of a five year lease for a 27,000 barrel per day FPSO, Afren plc has put in place the final piece of the development jigsaw on its Okoro Setu project offshore Nigeria. The AIM company is now on track to start producing from the Okoro and Setu oil deposits early next year, which should see the company meet its production goal of 15-20,000 barrels per day by mid-2008. Were now ready to roll, chief executive Osman Shahenshah told oilbarrel.com.

The FPSO, the Armada Perkasa, owned and operated by Malaysian firm Bumi Armada Berhad, has a storage capacity of 360,000 barrels and a processing capacity of 27,000 bpd. The unit will process the total well fluids, producing stabilised crude for storage in the FPSO with regular offtake by shuttle tanker. Associated gas will be used to power the vessel and used as lift gas to assist well productivity.

This is a significant milestone for Afren. Although not as hard to source as suitable drilling equipment, FPSOs are also in demand in the current market. This is a good vessel and we were able to negotiate good terms, said Shahenshah. We negotiated about a 15 per cent discount compared to what we thought we would have to pay. It is also a significant deal for Bumi Armada Berhad, marking its first FPSO contract in West African waters.

Afren has a fixed five year lease on the Armada Perkasa, with an option to then extend for another five years or buy the vessel outright. The Okoro Setu project has a base case life span of eight years. This could be extended or it could be produced more quickly, said Shahenshah.

The FPSO will be moored 1 km south of the field. The field will be drained by six deviated or horizontal gravel-packed wells, supported by a minimum facilities wellhead platform, with the crude exported to the FPSO by pipeline. The wells will start drilling in the third quarter using Global SantaFes Adriatic VI rig. Production from two wells will start early in 2008, with peak production of between 15,000 and 20,000 bpd by May.

The development is being financed by a fully underwritten US$200 million debt facility secured against the Okoro Setu reserves. The banks also demonstrated their confidence in the project by subscribing to a US$15 million equity investment in Afren.

The Okoro and Setu oil discoveries lie in OML 112 in the shallow waters of the eastern Niger Delta. Okoro was discovered in the 1970s and two wells have confirmed oil in two sands. Setu was discovered by local oil firm Amni International in 2002 and flowed between 1,500 and 3,500 barrels per day from five reservoir sands.

Afren is the technical services partner of Amni, which was awarded the fallow fields in 1993 as part of the Nigerian governments policy to encourage an indigenous oil industry. Amni joined forces with Afren in June 2006 and appraisal drilling quickly got underway.

Okoro-3 was drilled to 6,500 ft and confirmed the eastern extension of the field. A second well was drilled as a deviated sidetrack from the Okoro-3 wellbore, encountering a better than expected 70 ft of net oil pay. An independent reserves audit puts the 1P oil reserves for Okoro and Setu at 25 million barrels with the 2P number standing at 32 million barrels but there could be as much as 60 million barrels.

With all the pieces in place for Okoro Setu, Afren now plans to step up efforts on the Ogedeh development, also in the Niger Delta. The field was discovered by Chevron in 1993 when the oil giant was looking for a 100 million barrel accumulation. Ogedeh holds between 5 and 15 million barrels - not enough for the US oil major but sufficient to make a difference to a company of Afrens size

The company also has an active new ventures pipeline and expects to add some new projects to the portfolio before too long, both in Nigeria and further afield in West Africa. Speaking at the oilbarrel.com conference earlier this month, Shahenshah referred to a recent estimate from Total, which claims there are 16 billion barrels of undeveloped oil in the Nigerian onshore and shallow waters. This resource is held in pockets too small to interest the oil majors. Afren plans to take advantage of the opportunity this presents.

Sometime in Q1 of 2008 i strongly suspect we shall be cracking open some chateaus des Lafite Rothschild or Haut Brion or even bolly BUT not slumming it with Moet which maybe French champagne but is strictly for the masses ...l have a great feeeling about this one @+ J

I think so TheFrenchConnection

I see all the pieces fitting into place as many people are saying but is the sp stuck down with super glue!

Its just possible that this one has been seriously overlooked and when production gets going the sp could explode

Trouble for me is i bought a lot @ 82p, still 18% down with these.

My average is about 56p now i did buy a few in the 70s but managed to average down buying in the 40s
The one thing about this company is they do what they say and nearer production start up the more the s/p will climb and these s/ps will be long gone
I would like to think the company my surprise us up to production start up and lets not forget JDZ this is by all means not over

Keith