Solid performance from Afren with a bright and exciting future. Kenya looks exciting as competitors are drilling actively in the region throughout 2013.
The silence on Kurdistan appears to continue. Whilst they have acknowledge that tests have resumed on Simrit-2, there was no guidance on current depths achieved on Simrit-3. Not even an update on oil shows etc. The excuse on delayed Simrit-2 tests doesn’t sit well with me. There are a bucket load of operators in Kurdistan and not one of them have encountered major delays on rig approvals. It’s as if someone (or perhaps the KRG) do not want data from Simrit-2 to be known at this present time. As mentioned before on thesharehub, Simrit-2 is very much like a 7th exploration well on the Shaikan licence owned by GKP. It’s practically drilled on the very border line that separates the two licences.
A delay of over 6 months on these last 9 tests seems ridiculous.
But Kurdistan anything can happen – few eyes are there to oversee operations and you just have to trust the companies involved with what they state.
The simple fact remains – any buyer interested in Shaikan can with HUNT oil’s help/consent, gain a very crucial insight into the geology and structure of the Shaikan licence via data on Simrit-2 and 3.
Afren/Hunt now appear to be aiming for April or more likely May time for news releases on Simrit 2, and 3. GKP’s court case is cited to end as of end of Feb with up to 12 weeks for the Judge to reach a verdict. Furthermore, Local iraqi elections are set for April/May of this year.
Mmmm, interesting times and calendar of events.
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21 January 2013, Afren plc (AFR LN)
Trading statement and operations update
2012 FY production at record levels; E&A drilling campaign delivering significant success
London, 21 January 2013 – Afren plc (“Afren” or the “Company”), issues the following trading statement and operations update, in advance of the Company’s 2012 full year results which are scheduled for release on 25 March 2013. Information contained within this release is un-audited and is subject to further review.
Key Highlights
Exploration and Appraisal Activities
-- Three significant exploration discoveries in 2012
- Okoro Field Extension encountered 549 ft of net oil pay (Pmean 157 mmbbl STOIIP). First production well onstream at 5,000 bopd
- Ebok North Fault Block encountered 370 ft net oil pay (Pmean 100 mmbbl STOIIP)
- Simrit-2 in the Kurdistan region of Iraq encountered 1,342 ft of net oil pay ; tested 13,584 bopd from Triassic reservoirs, nine further DST’s ongoing
– Seismic data acquisition and ongoing prospect maturation has upgraded Afren East Africa Exploration prospectivity (5,838 mmboe net to Afren)
- 3,483 km 2D seismic, 2,262 km(2) 3D seismic and 1,193 km gravity and magnetic data acquired in 2012
-- 14 well E&A drilling campaign targeting net Pmean resources in excess of 670 mmboe
– Okwok-10 appraisal well (Nigeria), Simrit-3 exploration well (Kurdistan region of Iraq) and Paipai exploration well (Kenya) currently drilling
Development and Operations
– FY 2012 net production in line with guidance at 42,830 boepd; FY 2013E net production estimated to average between 40,000 boepd to 47,000 boepd (excluding Barda Rash)
– Progressing Field Development Plans for Okoro Field Extension, Ebok North Fault Block and Okwok offshore Nigeria
-- Barda Rash production initiated Q3 2012
Group financials
– Record 2012 financial results expected; 2012 sales revenue of approximately US$1,500 million forecast (+151% increase over 2011); realised average oil price of US$107/bbl (US$3.50/bbl average discount to Brent)
– 2012 full year capital expenditure of US$520 million; forecast 2013 capital expenditure of approximately US$620 million
– Net debt at 31 December 2012 was approximately US$488 million (31 December 2011: US$548 million)
Commenting today, Osman Shahenshah, Chief Executive of Afren plc, said:
“2012 saw record production and financial performance combined with significant exploration success in Nigeria and the Kurdistan region of Iraq. In 2013 we expect to further grow our reserves base through a multi-well exploration and appraisal drilling campaign in both established and new basins, while continuing to grow our production base. We are financially well positioned with robust cash flows, a strong balance sheet and the necessary financial capacity and flexibility to optimally explore and develop our high quality portfolio of growth opportunities well into the future. There is much to look forward to in 2013 and beyond.”
For further information contact:
Pelham Bell Pottinger (+44 20 7861 3232) James Henderson Mark Antelme ------------------------------
Trading Statement
Net production
Net production at the Company’s assets during the full year 2012 (subject to final reconciliation) was approximately 42,830 boepd, driven by the year-on-year increase in net production from the Ebok and Okoro fields, offshore Nigeria. Notably during the period, the Company commenced production from the Okoro Field Extension offshore Nigeria within nine months of announcing the discovery and also initiated production from the Barda Rash field in the Kurdistan region of Iraq.
Realised commodity prices and revenue
Realised commodity prices during 2012 were in line with the previous year. The Company realised an average oil price of US$107/bbl (representing a US$3.50/bbl average discount to Brent), and average gas price of US$5.85/mcf.
Total revenue for 2012 is expected to be circa US$1,500 million, compared with US$597 million in 2011. The increase in revenue is due to higher sales volumes in 2012, principally due to increased production from the Ebok and Okoro fields offshore Nigeria together with continued strength in commodity prices.
Oil inventory
Oil and gas inventory at 31 December 2012 was approximately US$36 million (31 December 2011: US$44 million), representing approximately 780,000 barrels net to Afren.
Hedging
Hedges covering approximately 4.7 million barrels are in place for the period 1 January 2013 to 30 June 2014, providing minimum floor prices on these volumes of between approximately US$80-US$90/bbl before costs.
Capital expenditure
Capital expenditure for 2012 amounted to approximately US$520 million, in line with guidance. Of this amount, approximately US$315 million was allocated to production and development activities and approximately US$200 million to exploration and appraisal (US$5 million other). Based on current plans, capital expenditure for 2013 is forecast to be approximately US$620 million.
Financing and net debt
Net debt, excluding finance leases, as at 31 December 2012 was US$488 million (31 December 2011: US$548 million) with cash at bank of US$525 million (31 December 2011: US$292 million).
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Kurdistan region of Iraq
Barda Rash
Having commenced an extensive testing programme at the BR-1 well in July 2012 and establishing oil rates in excess of 6,000 bopd of 28deg to 32deg API oil, as well as obtaining valuable information on the production characteristics of the Mus/Adiayah reservoir, the Company initiated production in August 2012 and has produced its first cargo of sales specification oil to tank. Initial storage capacity limits during the early phases of start-up at the field led the Company to restrict flow-to-tank from the well to approximately 18,800 barrels as at end 2012. The work-over and testing operations on the existing Barda Rash well-stock is continuing. The Viking I-10 rig has also been contracted to commence the first of two new wells to be drilled on the block by Afren which will target additional prospectivity while also enhancing the production capacity of the field.
Ain Sifni
On 17 April 2012, the Company announced that the Simrit-2 exploration well had successfully encountered an estimated 1,342 ft of net oil pay in Cretaceous, Jurassic and Triassic age reservoirs. The well was initially drilled to its prognosed total measured depth of 12,139 ft but was subsequently deepened to a revised total depth of 12,467 ft to test additional zones of prospectivity. The Partners completed drilling on the Simrit-2 exploration well in July 2012. The objective of the well was to test the western extent of the Simrit aniticline, a large scale east to west trending structure located on the northern part of the Ain Sifni PSC. Analysis of data collected over the deepened section of well indicated the continual presence of light oil shows, and extended the estimated net oil pay encountered by the well to 1,509 ft throughout Cretaceous, Jurassic and Triassic age reservoirs. No oil water contact was encountered in the target reservoirs.
Following the conclusion of drilling operations at Simrit-2, a comprehensive well test programme was undertaken. The Partners intend to undertake up to 12 separate drill stem tests (“DSTs”) in total, and announced on 26 July 2012 that the first batch of three DSTs in the Triassic age Kurra Chine formation had yielded an aggregate flow rate of 13,584 bopd of 39deg API oil. Operator Hunt Oil Middle East (“Hunt Oil”) has re-commenced testing operations after an extensive rig acceptance process for the Hitech-3 rig.
On 12 September 2012, Afren announced that exploration drilling had commenced at the East Simrit prospect (Simrit-3 well). The Simrit-3 well is located approximately 10 km east of the successful Simrit-2 discovery well, and is exploring the eastern extent of the large scale Simrit anticline. The operator Hunt Oil is planning to drill a further three exploration wells in 2013.