Afren to Deliver Strong Results for 2013, Driven by Nigeria

Africa and Kurdistan-focused independent producer Afren reported in trading update Tuesday that it expects to deliver record financial results for 2013, driven by strong production from offshore Nigeria.

Afren said that it estimates sales revenue for the year will come in around $1.7 billion, with operating cash flow of more than $1.1 billion. This, it said, has been driven by a year-on-year 14-percent increase in like-for-like net production, principally from the Ebok and Okoro fields, offshore Nigeria.

The company also confirmed that it and its partners will begin development of the Okoro Further Field Development, Ebok North Fault Block and Okwok in 2014 – all of which it expects to generate high-margin cash flow.

Afren expects to drill six new wells in Africa during 2014, including four in Nigeria.

Meanwhile, in the Kurdistan region of Iraq, Afren said it is expecting a resource upgrade to its Simrit discovery on the Ain Sifni block following a declaration of commerciality that has been submitted to the authorities there.

Afren's production in 2013 amounted to 47,112 barrels of oil equivalent per day, which was at the upper end of the guidance range of between 40,000 and 47,000 boepd provided by the company previously. For this year, the firm estimates it will produce around 40,000 boepd, which analysts at London-based investment bank Canaccord Genuity said is below their estimate of 45,000 boepd.

In a statement accompanying the trading update, Afren Chief Executive Osman Shahenshah:

"2013 has been another exceptional year for Afren, with a combination of record financial results, production ahead of guidance and industry leading exploration success. The play opening Ogo discovery in Nigeria was one of the largest global discoveries in 2013, and will be followed by further appraisal and exploration drilling.

"At the same time we will continue to allocate capital to the highest cash return projects. This will provide the necessary funding to continue to de-risk our material exploration opportunity set. With industry leading positions in three key global oil and gas regions, Nigeria, the Kurdistan region of Iraq and East Africa, we remain focused on maximizing value for our shareholders."


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