Afren Reports Record Results
LONDON -- Oil and gas exploration and production company Afren (ISE: AFR.L) announced its half-year results this morning and they were well received by shareholders, as pre-tax profits increased by a huge 621.7% to $316 million, up from $43.8 million at this stage last year.
Revenue increased to $771.7 million, a 379.3% lift up on H1 2011's $161 million. Management stated that these record financial results were driven by the year-on-year increase in net production from the Ebok field offshore Nigeria, while the company announced that production has begun at the Barda Rash field in the Kurdistan region of Iraq, a little more than a year after the acquisition took place.
Elsewhere in the results, shareholders will have been pleased with the positive net cash position of $443.7 million, up from $320.9 million at the half-time stage last year. Regular Foolish readers will be fully aware that the "D" in Stephen Bland's PYAD system stands for "debt" -- so for a small cap to have plenty in the bank is a very good sign. Rumors continue to circulate that Afren is being eyed up for a potential buyout by ExxonMobil, too.
Afren Chief Executive Osman Shahenshah talked about the future of the company:
The strong financial results, with over seven hundred million dollars of revenue and half a billion dollars of net operating cash flow, all from Afren's greenfield developments, is testimony to our strong and established operating track record. The Okoro East and Ebok North Fault Block discoveries in Nigeria and Simrit-2 discovery in the Kurdistan region of Iraq will add significantly to the already material 2P reserves base of 185 million barrels and 2P/2C base of 995 million barrels of oil equivalent.
In East Africa, the ongoing maturing of the portfolio has resulted in a mean prospective resources upgrade to 5,838 million barrels of oil equivalent (from 2,113 million barrels of oil equivalent). With a number of high impact exploration wells to be drilled in both West and East Africa and the Kurdistan region of Iraq, and the growing production base, Afren is well placed for continued success.
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