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Afren Expects Higher 2011 Revenues - Update

Africa-focused oil and gas company Afren Plc (AFR.L), Monday, said it expects about a 50 percent increase in revenues for the full year 2011, helped by higher production and improved commodity prices. The company's shares are down more than 5 percent on the London Stock Exchange.

For the full year, the company expects total revenues to be around $600 million, up from $319 million reported in the year 2010. The company attributed the increase in revenues to higher production due to production start up at Ebok field and commissioning of two infill wells at the Okoro field, combined with increase in realized commodity prices.

Afren said its net production at the company's assets during the year was about 19,200 boepd.

In the fourth quarter, production increased to an exit rate of 53,200 boepd, directly attributable to the company. This increase in production follows the commissioning and ramp up of all production wells associated with the initial phases of the Ebok field development, the company said.

Looking ahead to full-year 2012, Afren expects average production of 42,000 to 46,000 boepd.

During 2011, the company realized an average oil price of $109 per bbl, representing a $2.3 average discount to Brent, and an average gas price of $8.4 per mcf.

Capital expenditure in 2011 was about $550 million, and the company expects 2012 budget to be in the range of $450 million to $500 million.

Osman Shahenshah, chief executive of the company said, "We have started our 2012 exploration campaign with a significant discovery offshore Nigeria, through the Okoro East Exploration well. The multi well drilling campaign in Ghana, Nigeria, the Joint Development Zone of Nigeria São Tomé and Príncipe, Tanzania, Kenya and the Kurdistan region of Iraq, has the potential to materially transform and increase our discovered resource base."

The company is scheduled to announce its full-year results on March 27.

AFR.L is currently trading at 117.86 pence, down 6.74 pence or 5.41 percent, on a volume of 3.27 million shares on the LSE.

by RTTNews Staff Writer

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