This announcement coincides with the filing with the Canadian and UK securities regulatory authorities of Addax Petroleum's Financial Statements for the quarter ended September 30, 2007 and related Management's Discussion and Analysis.
Commenting, Addax Petroleum's President and Chief Executive Officer, Jean Claude Gandur, said: "The third quarter has been a record quarter for Addax Petroleum from both an operational and financial standpoint, continuing the strong growth momentum established in the first half of 2007. In addition to the steady growth in our Nigeria operations, we have made significant improvements at our fields in Gabon, both from an operational and production perspective. We also have made valuable progress at Taq Taq, delivering our most prolific step-out appraisal well to date. In the deepwater Joint Development Zone, we have significantly enhanced our portfolio with the addition of a 40% interest in JDZ Block 1. Looking forward into 2008, we foresee another exciting year of high activity and growth."
Selected Financial Highlights:
Petroleum sales before royalties in the third quarter of 2007 amounted to $925 million, an increase of 58% over petroleum sales before royalties of $584 million in the third quarter of 2006. The growth in petroleum sales before royalties arose from the combination of increased petroleum sales volumes and increased average crude oil sales price, up by 10% to $74.31 per barrel (/bbl) as compared to $67.60/bbl realized in the corresponding period in 2006.
Net income in the third quarter of 2007 was $122 million, an increase of 63% over net income of $75 million in the third quarter of 2006. Net income per share (basic and diluted) increased by 53% to $0.78 per share in the third quarter of 2007 compared to $0.51 per share in the corresponding period in 2006.
Funds Flow From Operations for the third quarter of 2007 increased 37% to $335 million compared to $244 million for the corresponding period in 2006. Funds Flow From Operations increased by 30% to $2.15 per share (basic) in the third quarter of 2007 compared to $1.65 per share in the corresponding quarter in 2006. On a diluted basis, Funds Flow From Operations per share increased by 25% to $2.06 per share in the third quarter of 2007 compared to $1.65 per share in the corresponding period in 2006.
New Business Highlights:
As previously announced on September 25, 2007, the Corporation has agreed to acquire a 40% working interest in Block 1 of the Joint Development Zone ("JDZ") from a subsidiary of ExxonMobil for a consideration of $78 million and 2 per cent of Addax Petroleum's share of profit oil produced from Block 1. Completion of the acquisition is subject to the approval of the Joint Development Authority of the JDZ. Upon completion of the acquisition, Addax Petroleum will have working interests in JDZ Blocks 1, 2, 3 and 4.
Selected Operational Highlights:
Average working interest oil production in the third quarter of 2007 was 128.2 thousand barrels per day (Mbbl/d), an increase of 40% over third quarter 2006 average oil production of 91.5 Mbbl/d. Nigeria production increased by 17% to 104.5 Mbbl/d in the third quarter of 2007 compared to 89.1 Mbbl/d in the corresponding period in 2006. Gabon contributed 23.7 Mbbl/d in the third quarter of 2007 compared to 2.4 Mbbl/d in the third quarter of 2006, when the Gabon production assets were acquired. Total oil production during the quarter was 11.8 MMbbl, as compared to oil sales volumes of 12.4 MMbbl during the quarter.
Continued step-out appraisal success in the Taq Taq field in the Kurdistan Region of Iraq and exploration success in OML137 offshore Nigeria, where a potentially significant gas discovery was made at Udele West at the start of the third quarter.
Capital expenditures, excluding new business acquisition considerations, farm-in fees and license signature fees, increased by 47% to $281 million in the third quarter of 2007, up from $191 million in the third quarter of 2006. Development capital expenditures totaled $250 million in the third quarter of 2007, an increase of 92% over third quarter 2006 development capital expenditures of $130 million. Exploration and appraisal capital expenditures decreased to $31 million in the third quarter of 2007 from $61 million in the third quarter of 2006.
Throughout the third quarter of 2007, the Corporation directly operated seven drilling rigs, four offshore Nigeria, one onshore Nigeria and two onshore Gabon, and indirectly operated one further drilling rig in the Kurdistan Region of Iraq through its joint venture company, Taq Taq Operating Company.
Development project highlights in the third quarter of 2007 include:
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