A Review of the Nigerian Energy Industry

Afren profit up from increased Nigerian output

13 November 2012, Sweetcrude, LONDON – AFREN, the UK firm with operations in Nigeria, has seen its profit rise following increased production off Nigeria.

Profit doubled at Africa and Middle East-focused Afren in the first nine months but some financial items dented vastly-improved revenues.

The company posted net profit in the first three quarters of $122.8 million as compared with $65.4 million a year earlier.

Revenues, however, were at a record high of $1.08 billion thanks to a full period of production from the Ebok field off Nigeria. Revenues for the first nine months of 2011 were $312.2 million.

This was despite the average realised price of energy dropping. For oil it went from $110.8 per barrel to $107.7 per barrel while for gas it sank from $8.53 per thousand cubic feet to $5.95 per mcf.

The cost of sales understandably soared as a consequence from $159 million to $533.2 million but there was a $14.4 million impairment charter related to a write-off on an abandoned well on the Keta Block in Ghana.

The company’s finance costs also ballooned from $36.8 million to $71.4 million and the tax bill soared from $47.5 million to $289 million.

Afren, which has a significant presence in West Africa and the Kurdistan region of Iraq, said average production to 11 November was 42,033 barrels of oil equivalent per day and was on track to reach full-year expectations

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