Afren annouces Strong underlying operational performance

Afren annouces Strong underlying operational performance

Significant exploration success
Afren plc (“Afren” or the “Group”), (LSE: AFR, FTSE 250 index), the independent exploration and production company announces its Half-yearly Results for the six months ended 30 June 2013 and an update on its operations year-to-date 2013, in accordance with the reporting requirements of the EU Transparency Directive. Information contained within this release is unaudited and is subject to further review.
2013 Half-yearly Results Summary
The first half of 2013 has been a period of notable success for Afren across all operational fronts. The period saw record production (up 13 per cent.) principally from the Ebok and Okoro fields, offshore Nigeria. The Group’s financial results reflect the consolidation of First Hydrocarbon Nigeria Company Limited (FHN) following the completion of the acquisition of an additional beneficial interest in FHN in the period and the early adoption of IFRS 10*. Post period end, Afren further increased its beneficial interest in FHN and commenced sales from the Barda Rash field in the Kurdistan region of Iraq. On the exploration front, the oil discovery at OPL 310 opens a new oil basin in an under-explored region with targeted resources believed to be in excess of pre-drill estimates (78 mmboe). We continue to make good progress on our exploration and appraisal (E&A) work programme targeting opportunities across the portfolio.
Financial Highlights 1H 2013 1H 2012 (restated*) Change
Realised oil price (US$/bbl) 104 109 (5%)
Net working interest production (boepd) 47,653 42,169 13%
Revenue (US$mm)** 797 778 2%
Gross profit (US$m)** 377 411 (8%)
Profit before tax (US$m)** 260 311 (16%)
Profit after tax (US$m)** 62 102 (39%)
Normalised profit after tax (US$m)** *** 112 119 (6%)
Operating cash flow (US$m)**** 564 571 (1%)
* Prior period results have been restated to reflect the consolidation of FHN, following the adoption of IFRS 10 and IFRS 11. Further details are provided in note 1 and note 14 of the condensed financial statements
** From continuing operations, for further details see note 13 of the condensed financial statements
*** See note 4 of the condensed financial statements
**** Operating cash flow before movements in working capital
Key Highlights
• Strong operating cash flow driven by a 13 per cent. year-on-year increase in net production to 47,653 boepd; on track for full year guidance of 40,000 – 47,000 boepd
• Continued E&A success
o Play opening discovery at OPL 310, offshore Nigeria
o DST programme at Simrit-2 on the Ain Sifni PSC, Kurdistan region of Iraq complete, with aggregate flow rates of 19,641 bopd achieved. Well being prepared for Extended Well Test operations
o Completion of drilling at Simrit-3. Multi-zone testing programme underway to confirm the resource potential and the eastern extent of the Simrit anticline
o Active exploration programme with ongoing Ogo-1 sidetrack and upcoming Ufon-1 well on OML 115 in Nigeria
• Active portfolio management
o Completion of farm-out (subject to Nigerian Ministerial Consent) of a 30 per cent. economic interest in OPL 310, offshore Nigeria, to Lekoil Limited
o Acquisition by FHN of 16.9 per cent. economic interest in OML 113. Synergies expected with OPL 310 development
o Agreement for sale of CI-11 block and Lion Gas Plant for total consideration of US$26.5 million, of which US$15.3 million will be settled in cash
o Proposed relinquishment of JDZ Block 1, Nigeria São Tomé & Príncipe
• Strong balance sheet and financial flexibility
o Cash at bank US$588 million (1H 2012: US$497 million); Net debt, excluding finance leases US$590 million (1H 2012: US$679 million). Full year capex guidance revised to US$650 million from US$620 million
Commenting today, Osman Shahenshah, Chief Executive, said:
“Afren continued to deliver strong operational results during the first half of 2013. We recorded a year-on-year increase in underlying net production of 13 per cent. principally from our green field developments offshore Nigeria. Our exploration campaign continues to deliver results, following the play opening discovery announced at OPL 310 offshore Nigeria, where further exploration drilling is ongoing. Elsewhere, we are continuing with exploration drilling and testing operations at the Ain Sifni PSC in Kurdistan. With high quality production underpinning both our strong financial position and exploration programme, we are well placed to realise numerous growth opportunities over the remainder of this year.”
Analyst Presentation
There will be a presentation today to analysts at 09:00 BST at the Lincoln Centre, 18 Lincoln’s Inn Fields, London, WC2A 3ED.
The presentation will also be broadcast live at www.afren.com where the accompanying presentation will be available, and on playback from 14:00 BST.
Source: www.afren.com
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