First Hydrocarbon Nigeria Limited

First Hydrocarbon Nigeria announces the acquisition of an interest in OML 26 onshore

Niger Delta
Lagos, Nigeria, 21 October 2010 First Hydrocarbon Nigeria Limited (FHN or the Company)
has announced the reaching of Definitive Agreements with Shell Petroleum Development
Company of Nigeria Ltd ("SPDC"), Total E&P Nigeria Ltd (Total) and Nigeria Agip Oil
Company Limited (NAOC) (together SPDC, Total and NAOC are referred to as the SPDC
JV), for the acquisition of a 45 per cent interest in OML 26, Delta State onshore Niger Delta.
The remaining 55 per cent stake remains the property of the Nigerian National Petroleum
Corporation (NNPC).
FHN has today announced the acquisition of a 45 per cent. interest in OML 26, which holds two
producing and three proved undeveloped fields, from the SPDC JV in Nigeria. Total
independently certified recoverable reserves and contingent resources are 184 million barrels.
Located onshore the Niger Delta the Ogini and Isoko fields are currently producing
approximately 5,000 bopd gross from a limited number of currently active drainage points, with
significant potential for further development. Existing flow station capacity for the fields is
currently 30,000 bopd. FHNs forward work programme across three phases is expected to
increase production to more than 40,000 bopd over the next four years. The transaction is
subject to the approvals of the Federal Government of Nigeria and NNPC.
The acquisition validates FHNs business model to acquire and develop substantial oil and gas
assets in Nigeria from the joint ventures between NNPC and major international oil companies.
The Company was established in 2009 with the objective of increasing indigenous involvement
in the upstream sector of the oil and gas industry. 55% of FHN is held by Nigerian institutions
and investors. FHN intends to list on the Nigerian Stock Exchange in the future, providing an
opportunity for all Nigerians to invest in the sector.
Chief (Dr.) Oladele Fajemirokun, Director of FHN, commented:
FHN is committed to expanding local upstream ownership and significantly adding to Nigerias
production base. We are very pleased to have reached our first ground breaking agreement with
the SPDC JV on the acquisition of their interests in OML 26 in Nigeria, delivering on the promise
we made upon inception.
Our partner and Technical Services Provider, Afren, has a long established operational track
record in Nigeria, having successfully worked with several indigenous companies. Together with
our partner, we will optimally develop the fallow fields within OML 26, while seeking to deliver on
our ambition to become an indigenous champion in the upstream sector by acquiring and
developing further discovered but undeveloped, under producing and shut-in fields.

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Egbert Imomoh, Chairman of Afren, commented:

Afrens support of First Hydrocarbon Nigerias acquisition of the Shell Petroleum Development
Company of Nigeria Ltd, Total E&P Nigeria Ltd and Nigeria Agip Oil Companys 45 per cent.
stake in OML 26, reinforces Afrens strategy - since 2006 to partner with Nigerian operators
and sponsor the development of the indigenous oil and gas sector in Nigeria.
With an established technical and operational track record, in particular gained through the
successful Okoro and Ebok greenfield developments, Afren is exceptionally well placed to
continue to lend its support to indigenous operators.
The assets
The Ogini and Isoko fields are currently producing approximately 5,000 bopd gross from a
limited number of currently active drainage points, with several wells currently shut in. Existing
flow station capacity for the fields is currently 30,000 bopd. Cumulative gross production to date
from Ogini and Isoko is 46.8 mmbbls and 27.1 mmbbls respectively.
Significant additional exploration potential has also been defined on OML 26, with estimates of
615 mmboe gross unrisked prospective resources across multiple prospects, that will continue
to be worked up in parallel to and integrated with development plans.
Forward work programme
A three phase field re-development has been defined for the Ogini and Isoko fields. Production
is expected to increase to 40,000 bopd, following the first two phases over four years. This will
include the drilling of 21 production wells and existing well locations will be expanded to
accommodate multi-well clusters. Workovers and side-tracking of existing production wells will
also be undertaken along with de-bottlenecking of existing production handling and export
facilities. Gas lift and other pressure support methods as deemed appropriate will also be
implemented.
Afren will provide technical and operational management services to FHN under an agreed set
of terms. Transition planning is underway between the SPDC team and FHN and its Technical
Services Provider Afren, who will operationally work together in order to ensure the smooth
transfer of operational control.
Enquiries:
africapracticeR&B

TimNewbold

CossWilliams

ManagingDirector

+2348054949866

MediaManager

+2348055535070

About FHN
In direct response to the Nigerian governments objective to increase the level of local participation in the
oil and gas sector FHN was established in June 2009 with the support of two leading Nigerian financial
institutions: First City Monument Bank Plc (FCMB") and Guaranty Trust Bank Plc (GTBank). FHN fulfils

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the Nigerian governments criteria for indigenous operators, and in line with its stated strategy it has and
will seek to further acquire substantial oil and gas assets in Nigeria.

www.fhnigeria.com

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