Afren, the oil explorer focused on west Africa, reported the first full-year profit in its history and is preparing to snap up more Nigerian oil fields from international operators who are retreating from the country.
Osman Shahenshah, chief executive, said Afren could make further Nigerian acquisitions in the first half of this year as it seeks to take advantage of majors such as Shell and Exxon scaling down operations in the country.
Last year the FTSE 250 explorer established First Hydrocarbon Nigeria, a vehicle created to make acquisitions in Africa’s largest oil producer.
“FHN was set up to take advantage of divestment from the majors. We have identified more than 100 fields that have 50m-200m barrels, which is of interest to us but too small for the majors to develop,” Mr Shahenshah said.
Afren reported a pre-tax profit of $483,000 (£323,000) for the year to December, having made a $55.6m loss the year before, as the first full-year production from its Okoro field, Block CI-11 and the Lion Gas Plant pushed up revenue almost eight-fold to $335.8m.
Mr Shahenshah also ruled out further dilutive equity fundraisings after the company raised money via share placings in May and December last year. Afren, which last week secured a $450m reserve-based credit facility, saw gearing cut from 82 per cent to a net cash position of $54.2m.
Afren’s independently audited proved and probable reserves for its key Nigerian Ebok field rose from 19m barrels to 108m, confirming its earlier assessment. The company also said that it planned to bring Ebok into production this year, taking production to 35,000 barrels a day.
Earnings per share fell from 15 cents to 2.6 cents as a result of dilution, and no dividend is payable.
The shares fell 1.3p to 103.2p.