Afren increased its net working interest production by 34 per cent in 2011 to 19,154 barrels of oil equivalent per day (boepd) – after it brought onstream the first two phases of its Nigerian Ebok development. Management expects net output of 42,000-46,000 boepd this year and that, longer term, the development project pipeline can deliver net production growth to 100,000 boepd by 2017 this year which suggests plenty of share price upside ahead.
But, despite the strengthening production base, Afren's focus remains on exploration, and exploration director Niall McCormack points to Afren having 3.5bn barrels of net prospective resources across its portfolio in Africa and Kurdistan. Indeed, exploration began well this year when the first well, Okoro East, drilled a "significant new oil discovery". Afren plans to drill up to a further 14 exploration and appraisal wells this year, targeting 800m barrels of resources mostly in Barda Rash in Kurdistan, and Okoro and Ebok in Nigeria. Kurdistan, however, offers the greatest resource potential – given the large geological structures and high drilling success rates achieved by other operators – and Afren expects to bring Barda Rash into production later this year.
Bank of America Merrill Lynch is forecasting 2012 EPS of 15¢ (from 9.38p in 2011).
| AFREN (AFR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 135.1p | MARKET VALUE: | £1,451m | |
| TOUCH: | 135.1-135.2p | 12-MONTH HIGH: | 174p | LOW: 72p |
| DIVIDEND YIELD: | nil | PE RATIO: | 18 | |
| NET ASSET VALUE: | 112¢* | NET DEBT: | 57% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | nil | -39.0 | -16.5 | nil |
| 2008 | 43.0 | -56.0 | -15.1 | nil |
| 2009 | 336 | 0.50 | -2.60 | nil |
| 2010 | 319 | 78.8 | 5.10 | nil |
| 2011 | 597 | 221 | 12.3 | nil |
| % change | +87 | +180 | +141 | - |
*Includes intangible assets of $714m, or 66¢ a share £1=$1.60 | ||||
