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Production problems see Afrens profits fall
- Afren pre-tax profits fall to £43.7m
- Access to new fields in Iraq show potential
- The Share Centre continues to recommend high risk investors ‘buy’ Afren
As independent oil company Afren reports a fall in profits for the first half of the year Graham Spooner, investment adviser at The Share Centre, explains what this means for investors.
“Afren saw figures for the period to the 30 June suffer as production levels decreased due to its Ebok field closing down for safety reasons. Pre-tax profits fell from £75.4m the year before to £43.7m and revenues were down from £214.8m to £161m.
“Investors seeking growth will be pleased to hear the company is ramping up production to meet its 50,000 barrels of oil equivalent per day target following previous problems. Drilling in key wells in the company’s main regions is planned for the second half of the year.
“Afren has also gained access to two fields in the Kurdistan region in Iraq costing £360m. One of the fields alone is expected to produce 75,000 barrels of light oil per day within the next five years.
“The company’s problems of late have seen the share price fall a long way back from the highs of around 165p in July to under 100p. Afren’s exposure to volatile regions, such as Africa and Iraq, is also a concern for us and we only recommend the company as a play for higher risk investors. Despite the company’s recent production problems, we believe there is still plenty of potential to be had from Afren.”
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THIS DATA IS PROVIDED BY GRAHAM SPOONER, INVESTMENT ADVISER AT THE SHARE CENTRE. THIS IS NOT INTENDED TO CONSTITUTE AN OFFER OR AGREEMENT TO BUY OR SELL INVESTMENTS.
Risk Warnings:
Investing in general, and the products and services mentioned above may not be suitable for all: if in doubt, individuals should seek independent financial advice. The value of investments and the income from them can go down as well as up and investors may not get back their original investment. Past performance is not a reliable indicator of future performance.
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Back2011-08-30 12:14:25 © Moneyextra.com