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Afren Sees 29% Growth in Oil Reserves After Expanding in Nigeria

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March 25 (Bloomberg) -- Afren Plc, a U.K.-based oil and gas company focused on West Africa and Iraq, will expand reserves by 29 percent after increasing its stake in a Nigerian explorer.

Proven and probable reserves will climb to 270 million barrels of oil equivalent from 210 million barrels, the London-based company said today in a statement. Afren agreed to pay about $37 million for 10.4 percent of First Hydrocarbon Nigeria Co., raising its stake to about 55 percent.

Oil companies are adding reserves to gain from a four-year increase in prices. Nigeria, Africa’s biggest oil-producing nation, accounted for 92 percent of Afren’s sales in 2011, data compiled by Bloomberg show. The country provides cash to invest in other regions including East Africa and the Middle East.

“We are currently drilling very exciting wells in Kurdistan, which are going very well,” Chief Executive Officer Osman Shahenshah said today in an interview. In Africa, the company is adding a “whole suite” of wells in Kenya, Tanzania and Madagascar, he said.

Afren advanced as much as 3.2 percent to 152.3 pence in London trading, the highest in a month. The stock was at 152 pence as of 9:59 a.m. local time, extending its gain this year to 16 percent.

The company also reported a 66 percent jump in 2012 net income to $202.5 million. Sales rose to a record $1.5 billion, according to a separate statement today. Its exploration program is targeting 650 million barrels of oil and gas resources this year, and output is forecast at 40,000 to 47,000 barrels a day.

Afren began production at the Barda Rash field in Iraqi Kurdistan last year. Volumes from the deposit may enable the company to exceed its output guidance in 2013, Galib Virani, an associate director at Afren, said in January.

The company’s other producing assets are in Nigeria and Ivory Coast. Elsewhere in Africa, it completed a seismic study in the Seychelles this quarter, the first three-dimensional survey in the archipelago, where the company may hold 2.8 billion barrels in prospective resources, it said.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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