Strong production growth from fields off Nigeria’s coast helped Africa-focused oil and gas producer Afren more than double annual revenues and pre-tax profits.
The FTSE 250 constituent, which also holds exploration assets in the Kurdistan region of northern Iraq, confirmed on Monday that it was paying $37m to increase its interest in First Hydrocarbon Nigeria from 45 per cent to 55 per cent.
The deal extends Afren’s interest in the OML 26 licence in Nigeria close to the town of Warri in the politically volatile Niger Delta. This follows completion of the sale to Nigeria-based FHN of a 45 per cent stake in the onshore block by Royal Dutch Shell, Total of France and Eni of Italy in November 2011.
The move by Afren to extend its interests in onshore Nigeria mirrors a similar deal made by FTSE peer Heritage Oil, which has also taken on stakes in once-prolific Nigerian fields from oil majors alongside local partners under a policy of indigenisation of the oil industry encouraged by the government.
But the main boost to Afren’s fortunes was delivered by strong growth at its Ebok and Okoro fields off Nigeria’s coast that led to group annual production advancing from 19,000 to 43,000 barrels of oil equivalent a day.