Afren (AFR) is desperate to put the sacking of its management team behind it. A positive update on its Nigerian operation is clearly a start, but the City is unimpressed and support for the shares, even at these depressed levels, is flaky.
At least the jacket (vertical steel structures) for its Ebok Central Fault Block Extension (CFBx) platform has now been installed. That means it can start installing the decks and bridge, which it will complete in January.
Targeting both producing and undeveloped reservoirs, nine new wells will be drilled and brought on stream at the Ebok field before the end of 2015, says Afren. It is targeting 50 million barrels of gross unrisked resources there and should begin drilling before the end of 2014.
An additional five new wells will be bought online at the North Fault Block (NFB), which is set to bring its third producing well on line by the middle of next month. Deutsche Bank reckons the NFB will have a "larger influence" on stopping the decline at Ebok.
Despite a turbulent couple of months, with the firing of management for illegal payments and suspension of Barda Rash operations in the Kurdistan region of Iraq, Afren is still on track to hit the lower range of its target for full-year net production of 32,000-36,000 barrels, excluding Barda Rash.
Afren has also spudded the Ameena East well offshore Nigeria with its partner Oriental, targeting 65 million barrels of oil.
Chief executive Toby Hayward said: "With incremental new production to be brought on stream from both the CFB and NFB platforms, as well as from the Okoro FFD, Okwok, OML 26 and OML 113 developments, Afren is expecting to deliver strong production and cash flow growth in 2015 and beyond.
"We are pleased to have commenced our drilling campaign at the Ameena East prospect and are excited about the potential there and at Ebok Deep."
However, oil industry expert Malcolm Graham-Wood has his reservations. "While these pieces of news may be good operationally the market is more concerned about the state of governance and management at the company, yesterday I mentioned the departure of a non-executive Director, more may follow which overshadows current trading," he says.
Source: iii.co.uk
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