Afren raises stake in Nigerian firm as it posts record earnings

AFRICAN-focused miner Afren yesterday said it had snapped up a further stake in a Nigerian exploration firm, boosting its reserves by 29 per cent.

Under the terms of the deal, Afren will acquire a further 10.4 per cent stake in oil firm First Hydrocarbon Nigeria in a deal worth $37m (£24m).

Following the purchase of the extra stake – which Bank of America Merrill Lynch advised on – Afren will own 54.8 per cent of the company.

The deal will boost Afren’s proved and probable reserves by 29 per cent to 279m barrels of oil equivalent, up from 210m barrels.

It comes as Afren, which has assets across Africa and in Iraq, posted record annual pre-tax profits of $594m, up 169 per cent year on year after more than doubling its output in 2012.

Revenue over the year grew by 151 per cent to $1.5bn, up from $597m in the previous year.

Production climbed 123 per cent over the year to 43,000 barrels of oil equivalent a day, and Afren expects average output to come in between 40,000 to 47,000 barrels in 2013.

Chief executive Osman Shahenshah told City A.M. yesterday that thanks to its consistent strategy, Afren expected to see more growth from exploration and production in the year to come.