By John Lee.
At today's AGM of Afren, which has operations (pictured) at Barda Rash in Kurdistan, the Chairman Egbert Imomoh opened the meeting with the following statement:
Our vision to be the leading independent upstream Exploration and Production (E&P) Company in each of the areas we operate is underpinned by a clear and consistent strategy - creating value for our shareholders across the E&P chain. In this regard, 2012 proved to be yet another defining year; we delivered record financial results driven by strong production performance at our greenfield developments, offshore Nigeria, and achieved significant exploration success with discoveries in Nigeria and the Kurdistan region of Iraq. In 2012, Group production grew by 123% to 43,059 boepd, turnover increased by 151% to c.US$1.5 billion, cash flow from operations increased by 177% to US$935 million; equivalent to US$60 per flowing barrel, a level that we believe is sustainable given the pipeline of existing production, development and appraisal opportunities within our portfolio.
Having established a proven track record as a fast-track developer of oil and gas assets through accretive low cost acquisitions, Afren demonstrated its credentials as an explorer in 2012 with discoveries at the Okoro Field Extension, Ebok North Fault Block ("Ebok NFB"), both offshore Nigeria, and at Simrit-2, located on the Ain Sifni PSC, Kurdistan region of Iraq, achieving an E&A success ratio in the year of 88%. Our success with the drill bit in Nigeria led to a 265% 2P reserves replacement ratio and increase in net 2P reserves to 210 mmboe. This was achieved while lowering our operating cost per barrel by 16% to US$15.0 per barrel and with a reduction in the Total Recordable Incident Rate by 33% to 1.47.
Using our fast track development skills and existing infrastructure, we commenced early production from both the Okoro Field Extension and Ebok NFB within ten months of discovery and are moving towards the finalisation of full field development solutions for both discoveries. In the Kurdistan region of Iraq, we commenced production operations from the Barda Rash field producing our first cargo of sales specification oil to tank. To date, approximately 18,800 barrels is held in storage at the field with first sales expected shortly. We have recently commenced Phase 2 operations on the field which will involve new wells to increase production capacity. We continue to maintain a close relationship with the government and remain positive regarding political developments in the region towards delivering significant and sustainable oil export revenues.