Afren plc announces that First Hydrocarbon Nigeria Company Limited (“FHN”) has been established to be a majority Nigerian owned oil and gas company in the indigenous Nigerian Exploration & Production (“E&P”) sector.
In direct response to the Nigerian government’s objective to increase the level of local participation in the oil and gas sector and in line with the Company’s strategy, Afren has established FHN with the support of two leading Nigerian financial institutions: First City Monument Bank Plc (“FCMB") and Guaranty Trust Bank Plc (“GTBank”). Afren has demonstrated its long-term commitment to working in partnership with indigenous companies and empowering local management in Nigeria; Afren also has a strong track record of working with Nigerian contractors and financial institutions. FHN has been created to build on - and extend - this platform. It will be fully capitalized at the time of consummating new acquisitions.
FHN will fulfil the Nigerian government’s criteria for indigenous operators, and will be used as a vehicle to acquire substantial oil and gas assets in Nigeria, including stakes in assets currently under negotiation, assets that may become available that are currently held by international independents and by the joint ventures between the Nigerian government and International Oil Companies, and assets that may be divested in connection with indigenous licensing rounds. FHN will also investigate opportunities to acquire the assets of other Nigerian indigenous companies, as appropriate.
Over time, FHN will be owned by a wider Nigerian stakeholder base, ensuring diversity of ownership and a reflection of Nigeria’s national character. Subject to market conditions, it is the intention that FHN will seek a listing on the Nigerian Stock Exchange in due course. FHN has been assisted in this task by FCMB and GTBank as financial advisors in Nigeria and Morgan Stanley as international advisor, Deloitte LLP as tax and audit advisor, and White & Case LLP as international legal advisor.
Afren was founded in late 2004 with the vision to become the premier pan-African independent exploration and production company. The Company has pursued a differentiated strategy based on partnerships with indigenous companies, African National Oil Companies and Governments. The Company has a strong African representation in its board of directors and amongst its management and shareholders.
Afren is also committed to working towards a solution to monetise the vast untapped gas reserves in the Gulf of Guinea, as evidenced by its cooperation with EdF, E.ON Ruhrgas and Gasol plc. Over this period, the Company has acquired stakes in 15 assets across 6 African countries, and currently has production of circa 26,000 boepd and 2P recoverable reserves from existing projects of 86 mmboe, with net unrisked resources from its exploration portfolio in excess of 500 mmboe. Afren has established a strong presence and track record in sub-Saharan Africa’s largest resource base, Nigeria, and has demonstrated its long-term commitment to working in partnership with indigenous companies and fully capitalizing on local management expertise. More than 70% of the Company’s existing reserves and production originates from Nigeria.
In early 2009, Afren announced the successful appraisal of the Ebok development (in partnership with Oriental Energy Resources, Nigeria National Petroleum Corporation and Exxon Mobil), which is set to deliver an additional 35,000 barrels of oil per day by the end of 2010. FHN has been established to capitalize on the Company’s existing platform and to actualize the Company’s vision of achieving broader African ownership in the upstream sector.
The initial board of directors will comprise of Egbert Imomoh, (Chairman, Afren), Alhaji Magaji Muhammad Inuwa, Chief (Dr) Oladele Fajemirokun, Dr Jonathan Long (Chairman of FCMB), Constantine Ogunbiyi (Director, Afren), Ethelbert J.L. Cooper (Co- Founder of Afren), a nominee from GTBank’s board and Osman Shahenshah (Chief Executive, Afren).