Production and reserves focus – Nigeria

Nigerian Opportunities

Nigeria is one of the most geologically attractive and prolifically producing  petroleum regions in the world. High API, low sulphur Sweet Bonny Light crude is arguably the world’s premier oil for refining into transport fuels and sells usually at a premium to Brent. The petroleum  sector in Nigeria is undergoing significant change creating  a series of once in a generation opportunities. The Nigerian Government is targeting increases in investments in the petroleum sector from $5 billion pa to $10 – $15 billion.

To achieve this, the Government is implementing changes in legislation to facilitate further indigenous participation.  Increased transparency in the sector will continue to decrease corruption and improve the co-operation and participation of local communities. The divestment by IOCs of onshore and shallow water offshore OMLs and marginal field assets is accelerating.

Strategy

The initial focus for AfroHawk is on Nigerian onshore or shallow water offshore reserve based acquisitions. These should be  either producing or capable of early cashflow within 6-18 months, significantly debt fundable and with 1P+2P reserves of at least 10-15 MMbbls  net to the Company. An AIM/LSE listing is planned in the first half of 2014 once certain assets and debt funding have been secured by contract by HACWA Pty Ltd, a Related Corporation. An independent valuation of HACWA and its assets will form the basis for an “in specie” share issue of AfroHawk shares to HACWA shareholders on the IPO of AfroHawk so that HACWA becomes a wholly owned subsidiary of AfroHawk. A significant uplift in value for HACWA shareholders is planned.

Management

AfroHawk, via HACWA,  will maintain a significant stake in any  joint ventures and will manage that investment by direct JV representation to carefully monitor and promote progress and profitability. Operatorship or profound technical input is required; we are not passive investors. AfroHawk will be headquartered in London but with significant management and technical personnel stationed in Nigeria.

The Directors and major shareholders in HACWA/AfroHawk are all variously veterans of the petroleum industry or related industries.  Their skills range from technical to finance, stockbroking, research, management and corporate dealings in listed and unlisted companies.  The inherent efficiency of the group, with their experience in identifying and listing projects and with long term high level contacts and connections, is indeed formidable and is designed to maximise shareholder wealth and returns.

Local  Partners-Key to Success

AfroHawk has developed solid working relationships with trusted Nigerian professionals with high level political, IOC, DPR, NNPC and NPDC connections in Nigeria, Australia and Britain. The Company has received considerable support from  the Nigerian Ambassador to Australia, His Excellency Ayoola Olukanni and Mr Hugh Morgan, the Co-Chairman of the Australian-Nigerian Trade and Investment Council. Local partner groups with significant local and international experience have signed collaboration agreements to form up to four SPVs in order to focus on specific assets. Many AfroHawk  local partner groups are headed by ex IOC major staff from senior management and executive levels with project specific asset management experience.

Local Partners-Community based Programmes

Community development in any land based or shallow water offshore operations is a key factor in developing rapid and profitable cash flow. This factor is fundamentally essential and is the keystone of any successful production operations. Local communities must become partners via Company sponsored initiatives of employment, sanitation, clean potable water, education and training. A well nurtured local community can be of valuable assistance in forestalling local unrest and in preventing the ingress of rogue elements.

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