Afren strengthens grip in Nigeria

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The Nigeria-focused oil producer Afren is building up its stake in First Hydrocarbon Nigeria to over 90%, with the purchase of a further 23% of the company’s equity from other shareholders for US$105.4m and an option to buy a further 12.5%.

The deal follows shareholder approval of the earlier announced acquisition of a 10.4% in FHN, which took its interest in FHN to a controlling 54.8% and boosted its reserves by almost a third to 270 million barrels of oil equivalent (BOE). Today’s deal boosts its share of FHN’s proven reserves and potential upside to over 90% (and increases commitment to Nigeria). FHN has a 45% interest in Nigeria’s OML 26 offshore licence, which has two producing fields and three proven by undeveloped prospects.

Afren, whose main producing assets are in Nigeria but which also operates in Kenya and Kurdistan, recorded a 123% hike in annual pre-tax profits to US$594m last year, after its oil production more than doubled over 2011 to average 43,000 barrels a day.

It confirmed that output in 2013 was on course to average between 40,000 and 47,000 BOE per day, in line with a forecast made in January.

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