Here is just one example in which pre-drill expecatations were doubled....
Afren’s Ebok Is ‘Transformational,’ Shahenshah Says
By Guy Collins
March 26 (Bloomberg) -- Afren Plc, a U.K. explorer focused on West Africa, will produce more oil than anticipated from its Ebok field off Nigeria and expects the development to be “transformational” for the company.
Afren, based in London, predicts the field will produce 15,000 to 25,000 barrels of oil a day early next year, rising to between 35,000 and 50,000 barrels a day by the end of 2010. The field’s appraisal “considerably” exceeded its forecasts, it said in a statement distributed by the Regulatory News Service.
The Nigerian field will boost Afren’s total production to 65,000 barrels a day by late 2010, compared with 27,000 barrels now. The drilling results come as crude oil has climbed back above $50 a barrel after trading below $40 last month.
Afren “has doubled its pre-drill expectations and added a high-quality development project to its asset portfolio,” Peter Nicol, an analyst at Tristone Capital Ltd., wrote in a report.
Afren, founded in 2004, has 15 assets in six African countries, and is developing the Ebok field with partner Oriental Energy Resources. Afren has a 40 percent working interest in Ebok.
“It’s transformational for us,” Afren Chief Executive Officer Osman Shahenshah said in a telephone interview, adding the company will continue to look for further assets to develop. “We’re open-minded to anything in Africa, but we see the greatest opportunities in the Gulf of Guinea.”
African Assets
Afren rose 3 pence, or 8.4 percent, to 38.75 pence in London. Its shares have risen 49 percent this year and are trading at a four-month high.
The company produces oil and gas from Nigeria and Ivory Coast and has development projects in Ghana, Republic of Congo, Gabon and Sao Tome and Principe. It has a reserves base of 86 million barrels of oil equivalent and net prospective resources of 440 million barrels, according to slides prepared for a presentation today.
Afren is fully-funded through its budget spending, and had a cash balance of $269 million, with net debt of $13 million, at the end of June. “We don’t need to raise finance,” Shahenshah said.
In September Afren reported its net loss for the first half of 2008 widened to $26.8 million from $10.2 million, reflecting investment in business development.
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