The Chairman, Mr. Egbert Imomoh who disclosed this at the Annual General Meeting in London stated that year 2012 witnessed a lot of milestones for the company.
For instance, He said that Group production grew by 123per cent to 43,059 bpd, turnover increased by 151per cent to c.US$1.5 billion, cash flow from operations increased by 177per cent to US$935 million; equivalent to US$60 per flowing barrel, a level that we believe is sustainable given the pipeline of existing production, development and appraisal opportunities within our portfolio.
He said that: “Having established a proven track record as a fast-track developer of oil and gas assets through accretive low cost acquisitions, Afren demonstrated its credentials as an explorer in 2012 with discoveries at the Okoro Field Extension, Ebok North Fault Block (“Ebok NFB”), both offshore Nigeria, and at Simrit- 2, located on the Ain Sifni PSC, Kurdistan region of Iraq, achieving an E&A success ratio in the year of 88per cent.
Imomoh said the success with the drill bit in Nigeria led to a 265per cent 2P reserves replacement ratio and increase in net 2P reserves to 210 mmboe, adding that: “This was achieved while lowering our operating cost per barrel by 16per cent to US$15.0 per barrel and with a reduction in the Total Recordable Incident Rate by 33per cent to 1.47.
He said using the firm’s development skills and existing infrastructure, we commenced early production from both the Okoro Field Extension and Ebok NFB within ten months of discovery and are moving towards the finalisation of full field development solutions for both discoveries.
Imomoh stated that: “In the Kurdistan region of Iraq, we commenced production operations from the Barda Rash field producing our first cargo of sales specification oil to tank. To date, approximately 18,800 barrels is held in storage at the field with first sales expected shortly. We have recently commenced Phase 2 operations on the field which will involve new wells to increase production capacity.
He said the firm would continue to maintain a close relationship with the government and remain positive regarding political developments in the region towards delivering significant and sustainable oil export revenues.
The Chairman said: “In East Africa, 2012 was also a period of extensive data acquisition across our portfolio and as a result, we have significantly increased our net prospective resource volume by 176per cent to 5,838 mmboe. Over the next 12 to 18 months, we will continue to de-risk our exploration acreage across our portfolio through a high-impact E&A campaign targeting both frontier and established basins.
He said the firm started 2013 strongly, with year-on-year growth of 14% in net production in Q1 2013 and remain firmly ontrack to achieve our production guidance of 40,000 to 47,000 boepd net to Afren.
Imomoh stated that it made a successful start 2013 drilling campaign with the successful Okwok- 10 and Okwok-11 appraisal wells which results were being integrated into the field model and optimised Field Development Plan (FDP), prior to submission to the Nigerian authorities later this year.
He remarked that the Group remains in a position of financial strength, with robust high-margin cash flows being generated from a growing production base supported by a strong balance sheet with the capacity and flexibility to optimally explore and develop our high-quality portfolio of growth opportunities well into the future.
The Chairman said that: “In addition, as part of our active portfolio management process, we will look to farm-out and divest assets at different points in the value chain to either increase the rate of return on investment from our portfolio or to use the proceeds to recycle cash and maintain capital efficiency. In this regard, we completed the farm out of 17.14per cent participating interest in the OPL 310 licence, offshore Nigeria, to Lekoil in May 2013. An exploration well is currently being drilled at the Ogo prospect and together with a planned side-track which, in aggregate, will be targeting gross P50 prospective resources of 202 mmboe.
Information from National Mirror was used in this report.