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AFREN RECORDS N6.9B PROFIT, TARGETS 40,000BPD OIL PRODUCTION OUTPUT

By NBF News
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AFREN Plc has recorded a profit after tax of $45.9 million (N6.9 billion) in 2010 from a loss of $16.8 million (N2.5 billion) in 2009. The company plans to hit 40,000 bpd this year.

Afren said strong oil prices during the period benefited revenues, which, together with reduced depreciation, depletion and amortisation and finance charges, substantially offset lower net volumes, having reached payback on Okoro field.

The company's Chief Executive Officer, Osman Shahenshah stated in its financial report recently that Afren's financial profile will be further strengthened in 2011, with ramp up of production at the Ebok field.

Shahenshah stated: '2010 was a year of operational delivery and we are delighted to report our first full year profit of $45.9 million as a result. Looking ahead, we are extremely well positioned for the next phase of our growth story. With a 180 per cent growth in production to 40,000 bpd expected in 2011, we will leverage our West African production base to pursue multiple high impact exploration targets in both East and West Africa.

He disclosed that the company made significant progress on the Ebok oil field development, progressed in the company's Nigerian growth strategy and made a strategic exploration-led entry into East Africa in 2010.

He added that the company has a balanced portfolio combining production and development assets that it can leverage to internally fund high impact exploration and appraisal activities, underpinned by a capital structure that will support a strong acquisition opportunity set.

'In addition, we have the capital structure in place to capitalise on our strategic position in key markets and expect to deliver further accretive

Shehenshah oil production from its Ebok project started in February, behind its earlier goal of October, but in line with guidance it gave in December, as it confirmed it was on track to produce 40,000 barrels of oil equivalent per day in 2011.

'We'll reach 15,000 barrels a day from the first phase during the course of April and 35,000 barrels a day by the end of the second quarter.

'In Ghana, we farmed down a 35 per cent interest and operatorship in the Keta Block to ENI in return for a full carry through the drilling of one exploration well, contribution to back costs and future seismic acquisition. Post farm down, Afren will retain a 35 per cent interest in the block. Other partners on the block are GNPC (10 per cent) and Mitsui E&P Ghana Limited (20 per cent). The farm down is subject to customary government and partner approvals', he said.

Afren became the first UK listed independent E&P company to access the bond market in 2011, raising a total of $500 million and in the process diversified its sources of capital. With forward E&A capex internally funded, and significant additional working capital available, the Company's ability to capitalise on M&A growth opportunities has been greatly enhanced.

Afren has achieved significant portfolio growth, and shown innovation in accessing new sources of capital. We expect 2011 to be another defining year in the history of Afren, characterised by strong production growth and an internally funded E&A drilling campaign, whilst continuing to capitalise on a strong acquisitions pipe