Afren surpasses production target

As a result of the ramp-up in production at the Ebok field offshore Nigeria, aggregate roduction attributable to Afren has reached about 55,400 barrels of oil equivalent per day (boepd)

Afren, according to Proactive Investors UK, reported that group oil production at the end of last year reached 55,400 barrels of oil equivalent, higher than the 50,000 boepd it had previously forecast.

The news lifted the company’s shares in early deals yesterday and extended gains as the morning session progressed. The stock was trading up 10.8 per cent at 94.95 pence.

Production at the Ebok field, located offshore southeast Nigeria, has been increased to a stabilised rate of about 40,000 barrels of oil per day, following the commissioning and ramp-up of all production wells associated with the initial phases of the Ebok development. 
As a result of the ramp-up in production at the Ebok field, aggregate net working interest production attributable to Afren has reached a rate of about 55,400 boepd. 

A production rate above the 50,000 boepd target has been sustained since December 19 2011 from the Ebok, Okoro and Côte d’Ivoire operations.

In addition, gross production on the Ogini and Isoko fields in Nigeria has nearly doubled to around 10,500 bpd from around 6,000 bpd, since its 45 per cent owned associate First Hydrocarbon Nigeria and its partner Nigerian Petroleum Development Company (NPDC) completed the acquisition of the OML 26 asset on December 1, 2011.

Afren Chief Executive Osman Shahenshah said: “We are delighted that all production wells drilled as part of the initial phases of the Ebok field development have been inaugurated, and to have increased production to 40,000 bopd, in line with expectations.  This marks one of the quickest independent developments of its scale in Nigeria to date.

“The group is in a strong position with aggregate net working interest production of 55,400 boepd going into 2012, as we embark upon an extensive exploration and appraisal (E&A) drilling campaign in Ghana, Nigeria, the joint development zone of Nigeria São Tomé and Príncipe, Tanzania, Kenya and the Kurdistan region of Iraq, that has the potential to materially transform and increase our discovered resource base.”
Westhouse Securities is maintaining its ‘buy’ stance on Afren. The brokerage company said in its ‘Oil and Gas Filter’ report: “Having guided the market to 50,000 boepd as recently as mid-November, this announcement marks a positive start to 2012. It also demonstrates that the development work and focus of the group on the Ebok field is set to produce very tangible results in 2012.”

On the planned exploration and development work this year, Westhouse said the 2012 programme will potentially add significant new resources to the company’s base, as well as continue to add production gains.
Brewin Dolphin stated in its Morning Brew, saying that meeting its stated target exit rate is positive news for the company, “although we would question how sustainable the current rates are.

“Also, we note that Afren will have underperformed on its original annual average production targets. Focus now turns to exploration, with the outlined 15 well exploration programme, which if adhered to could expose investors to significant upside potential. We retain our ADD recommendation but move our price target to Under Review for the time being.”

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Afren surpasses production target