AFREN ACQUIRES ASSETS IN ASIA, POSTS N3.94BN PROFIT

Afren Plc, an independent oil and gas company in Nigeria, has announced its expansion into the oil-rich middle-eastern region of the world, with the acquisition of a number of assets in the Kurdistan region of Iraq.

According to a statement by Chief Executive officer of the company, Mr. Osman Shahenshah, the acquisition is consistent with its strategy of acquiring low cost barrels, increasing its recoverable reserves and resources base by over 700 per cent at a cost of under $1 per barrel

He noted that with the acquisition, the company is now strategically positioned in two of the world's most prolific oil producing countries, Nigeria and Iraq.

In addition, the company announced a profit of N3.94 billion ($26.1 million) in its financial performance for the six months ended, June 31, 2011.

The company said that the financial results for the first half of the year reflect a lower net production rate compared to the same period in 2010, due primarily to cost recovery.

The company's turnover, however, dropped by 25 per cent to N24.31 billion ($161 million) from N32.314 billion ($214 million) recorded in the same period in 2010,

It recorded gross profit of N11.959 billion ($79.2 million), dropping by 18.4 per cent, from N14.647 billion ($97 million) recorded in 2010.

Speaking on its financial performance, Chairman of the company, Mr. Egbert Imomoh

said, 'Our financial position also reflects cash at bank of N48.455 billion ($320.9 million), net debt N51.79 billion ($343 million) and gearing of 37.5 per cent.

'These results are a strong endorsement of our business model. Financially, the company has maintained a conservative capital structure. Also, Afren became the first United Kingdom listed independent exploration and production company to access the bond market with a N75.5 billion ($500 million) high yield offering.'

Speaking further, Shahenshah said the company is well-positioned with low gearing and substantial resources available to execute planned work programme to pursue inorganic growth opportunities that were available.

He said, 'Afren continues to make good operational progress, with reservoir performance and drilling results at our Ebok and Okoro fields at the upper end of expectations.  We are delighted to have acquired, post the period end, a high quality portfolio of assets in, and gain entry into the Kurdistan region of Iraq.

'The acquisition is consistent with our strategy of acquiring low cost barrels, increases our recoverable reserves and resources base by over 700 per cent at a cost of under $1 per barrel and means that Afren is now strategically positioned in two of the world's most prolific oil producing countries in Nigeria and Iraq.

'Our planned exploration campaign is due to commence shortly with the drilling of key wells in each of our core regions that, if successful, could materially increase the company's reserves base.'