27th Mar 2014 08:49
LONDON (Alliance News) - Afren PLC said Thursday revenue grew 5% for the full-year, boosted by strong production figures and exploration success but saw pretax profit tumble due to impairment charges and joint-venture losses.
Afren said full-year revenue came in at USD1.64 billion, up 5% on the USD1.57 billion recorded in 2012. Pretax profit for the year to December 31, 2013 declined by 144% to USD318 million from USD569 million.
Net working interest production in the year increased to 47,112 boepd representing a like-for-like year-on-year increase of 8%, said the firm.
During the year, the company said the basin-opening discovery at the Ogo-1 well, located on the OPL 310 license offshore Nigeria pushed production figures higher. The well encountered light oil and condensate rich gas in the four-way dip closed structure and light oil/condensate in the syn-rift with estimated P50 to P10 gross recoverable resources significantly ahead of pre-drill expectations at 774 to 1,180 mmboe, respectively.
Afren said the well discovery was the third largest discovery globally in 2013 and the largest in Nigeria for a decade.
The independent exploration and production company also notes that its successful acquisitions during the year have delivered a 2P reserves replacement ratio of 201%, including Okwok following FDP approval in January 2014, representing an increase in net 2P reserves from 270 to 286 mmbbls.
However, unsuccessful wells at La Noumbi and Kenya Block 10A and other impairments on licences resulted in the firm booking write-offs of USD88 million.
The FTSE 250-listed firm said its pretax profit hit came from an impairment charge on oil and gas assets of USD61 million, up from the USD15 million charge logged in 2012, relates to the write-off of costs of Kenya Block 10A, which is to be relinquished, and the group's share of the cost of Kola-1 and Kola-2 wells at La Noumbi, which were drilled during the year and assessed as commercially unsuccessful. A further impairment has been charged in relation to La Noumbi following the partnership's agreement to a 50% relinquishment on the block.
The profit reading for the year also takes into consideration the USD27 million loss from joint ventures, which principally relates to the impairment of Afren's interest in JDZ following the decision to withdraw our participation from the JDZ Block 1, said the firm.
Looking ahead, the firm said it is targeting double digit growth in net production over the next five years. "We have an exciting E&A campaign planned over the next 12 months that will be targeting over 1,200 mmboe in net resources across proven petroleum systems in both established and frontier basins," said the company.
The firm is confident in its strategy and potential opportunities for the coming year, "2013 has been another excellent year for Afren," said Osman Shahenshah, Chief Executive, "with a combination of record revenues and cash flows, production ahead of guidance and industry leading exploration success... Looking ahead, we will maintain our strategy of allocating capital to the highest cash return opportunities that will provide the necessary funding to continue to de-risk our material resource base. Supported by a strengthened balance sheet, a track record of project delivery and exploration success, we are well placed to continue to create significant value for our shareholders."
Ahares in Afren were trading 0.46% higher at 151.5 pence per share Thursday morning.
By Alice Attwood; [email protected]; @AliceAtAlliance
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