Annual Report and Notice of General Meeting (0828C)
April 26 2012 - 2:00AM
UK Regulatory
TIDMAFR
RNS Number : 0828C
Afren PLC
26 April 2012
Afren plc (AFR LN)
Annual Financial Report and Notice of General Meeting
London 26 April 2012 Following the release on 27 March 2012 of
Afren plc's ("Afren" or the "Company") preliminary full year
results for the year ended 31 December 2011 (the "Preliminary
Announcement"), the Company announces it has published its Annual
Report and Accounts for 2011 (the "Annual Report and
Accounts").
The Company's 2012 Annual General Meeting will be held at the
offices of White & Case LLP, 5 Old Broad Street, London, EC2N
1DW on Wednesday 6 June 2012 at 11.00 am. Copies of the Annual
Report and Accounts and the Notice of the Annual General Meeting
2012 are available to view on the Company's website at
www.afren.com.
In accordance with Disclosure and Transparency Rule 6.3.5(2) (b)
additional information is set out in the appendices to this
announcement. The Preliminary Announcement included a set of
condensed financial statements and a fair review of the development
and performance of the business and the position of the Company and
the group.
Pursuant to Listing Rule 9.6.1, copies of each of the Annual
Report and Accounts, the Notice of the Company's 2012 Annual
General Meeting and the form of proxy in relation to the 2012
Annual General Meeting will shortly be available for inspection on
the National Storage Mechanism which can be accessed at
http://www.morningstar.co.uk/uk/NSM.
For further information contact:
Afren plc (+44 20 7864 Pelham Bell Pottinger (+44 20 7861 3232)
3700)
Andrew Dymond James Henderson
Investor Relations Mark Antelme
======================= =========================================
Notes to Editors
Afren is an independent upstream oil and gas exploration and
production company listed on the main market of the London Stock
Exchange and constituent of the Financial Times Stock Exchange
Index of the leading 250 UK listed companies. Afren has a portfolio
of 29 assets across 12 countries spanning the full cycle E&P
value chain. Afren is currently producing from its assets offshore
Nigeria and Cote d'Ivoire and holds further interests in the
Kurdistan region of Iraq, Ghana, Nigeria, Cote d'Ivoire, Congo
Brazzaville, the Joint Development Zone of Nigeria - Sao Tome &
Principe, Kenya, Ethiopia, Madagascar, Seychelles, Tanzania and
South Africa.
For more information please refer to www.afren.com. Appendix A:
Directors' Responsibility Statement
The following Directors' Responsibility Statement is extracted
from page 82 of the Annual Report and Accounts.
Directors' Responsibility Statement
I confirm to the best of my knowledge:
1. The financial statements, prepared in accordance with
International Financial Reporting Standards as adopted by the EU,
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
2. The management report, which is incorporated into the
Directors' Report, includes a fair review of the development and
performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face.
By order of the Board
Osman Shahenshah
Chief Executive
27 March 2012
Appendix B: Principal Risks and Uncertainties
The following description of principal risks and uncertainties
is extracted from pages 22 and 24 of the Annual Report and
Accounts.
Principal Risks and Uncertainties
We have identified the following principal risks and
uncertainties in relation to the Group's financial and operational
performance in 2011.
Key risk Description and impact How do we manage it?
-------------- ------------------------------------------------------------ ------------------------------------------------------------
OPERATIONAL RISK
------------------------------------------------------------------------------------------------------------------------------------------
Field
delivery * Field delivery risk applies to all phases of the E&P * All operations are subject to risk reviews to
risk cycle from seismic acquisition through to production identify as early as possible potential risks to
operations. At each phase the mitigating measures delivery.
will be different, however failure to control risks
will manifest itself as project delays, cost overruns
high production costs, early field decommissioning * Our engineers analyse results from appraisal and
and ultimately lower than expected reserves. development wells and determine the appropriate
course of action in terms of drilling programme and
facility design.
* All projects are closely monitored to ensure the
project delivers against plan and to enable actions
to be taken to maintain progress.
* Project finances are monitored against budget to
minimise overruns.
* Production operations are closely monitored to ensure
that unplanned downtime is minimised and that
operating costs are tightly controlled.
* Actual production is regularly checked against the
annual production forecast.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Exploration
failure * Exploration activities can be capital intensive and * A dedicated team has been established under the
may involve a high degree of risk. Sustained leadership of the new Exploration Director, to
exploration failure will impact the growth and upside exploit the exploration portfolio.
potential of the Company.
* Exploration assets are subject to a rigorous peer
review process.
* Exploration risk is evaluated for each prospect by
looking in detail at how to de-risk the key elements
of the subsurface data, source rock, reservoir,
trapping and seal mechanisms, etc. Prospects are
subsequently ranked and budgets approved.
* Exploration costs are funded by planned operational
cash flows in 2012.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Environmental
/ * As Afren's activities expand there is a continuing * Afren has a comprehensive EHSS management system with
safety focus on preventing major pollution and/or an annual independent audit programme to ensure
incidents significant loss of life due to systems or equipment effective implementation.
failure. We have implemented EHSS management systems
based on best industry practice at both the corporate
and country level. * Dedicated EHSS teams in each area of operation.
* Contingency plans in place.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Unfulfilled
work/PSC * Loss of production interest or exploration licence * The operations, finance and legal functions jointly
obligations due to incomplete fulfilment of PSC obligations. monitor compliance with licence obligations.
* Maintenance of good open working relationships with
local governments in the countries of operation.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
EXTERNAL RISK
------------------------------------------------------------------------------------------------------------------------------------------
Geo-political
risk * The countries in which Afren operates face political, * Ongoing monitoring and close liaison on the ground to
socio-economic and legal uncertainties. monitor the situation from an Afren safety and
security perspective.
* 2011 has seen some ethnic tension and public protests
in Nigeria. These events have not impacted Afren * Contingency plans in place.
operations.
* In Cote d'Ivoire there was civil disruption
throughout 2010 and 2011 following the disputed
election. The situation ultimately ended with the
change in government in mid 2011. The country is
gradually returning to a state of peace and
stability.
* In the Kurdistan region of Iraq there are
geopolitical and legal uncertainties, particularly
associated with the licensing framework and ability
to export.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Security
incidents * Afren continues to operate in regions where * Dedicated security teams in each area of operation.
kidnapping, piracy and criminal attacks are
commonplace.
* Robust security management programme.
* As we move into exploration activities in East Africa
and development in the Kurdistan region of Iraq, * Security risk assessments for each asset and
management of security risks will continue to be a operation.
major strand in our risk management programme.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Host
community * Our operations both on and offshore have the * Afren has a tried and tested system for managing
action potential for interruption by our host communities if community affairs which is applied to all operations.
relationships are not well established.
* Dedicated community affairs teams are in place where
required.
* Contingency plans in place.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Oil price
volatility * Oil prices can fluctuate significantly. * The policy of the Group is to protect its minimum
cash flow requirements in the context of a sustained
downturn in oil prices.
* The Group strategy to manage oil price risk is to
hedge between 20-30% of the production curve by using
financial instruments which allow the Group to
protect the downside risk.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
STRATEGIC
RISK
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Bribery and
corruption * 2010 saw the introduction of the UK Anti-bribery and * Afren has implemented a Code of Business Conduct
Corruption Act. As an oil and gas operator working in across all its operations.
Africa, Afren is potentially exposed to accusations
of poor practise in this important area of business.
* An independent whistle-blowing hotline has been
established to enable concerns about poor practise to
be voiced without the fear of reprisal.
* Additional policy and processes have been established
to meet the stringent requirements of the UK
anti-bribery and corruption legislation.
* Audit and Risk Committee in place to review
governance and internal controls.
* Risk Management function working with key functions
in the business.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Management
of growth * As the business continues to grow, so does the * All acquisitions are subject to thorough due
requirement for competent personnel with the right diligence in order to deliver an attractive
skills in the right place at the right time. Failure integration plan.
to manage either organic growth or to integrate
acquisitions will result in delays and other impacts
on key objectives. * Remuneration policies are designed to incentivise,
motivate and retain key employees as well as to
attract new personnel as and when required.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Loss of key
employees * Loss of knowledge and skills to the Group in * Succession planning is considered on a Group-wide
particular in countries of operation. basis, taking into account the development of the
executive and senior management.
* Intensified competition for human talent in Africa
and the Middle East. * Remuneration policies are designed to incentivise,
motivate and retain key employees including
Directors.
* Inability to attract required quality of personnel to
fill vacancies.
* Salaries and reward of senior executives, including
Directors, set at competitive levels using
* Afren has continued through 2011 to minimise the third-party benchmarks.
staff turnover rate and to recruit highly talented
individuals when required.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
FINANCIAL
RISK
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Taxation and
other * There is a risk that future changes impact our * Our financial and legal teams monitor current
legislation profitability. legislation and proposed changes and incorporate
changes these into our working practices.
* Maintenance of good open working relationships with
local authorities in the countries of operation.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
Treasury
management * The availability of financing to maintain the ongoing * The Group has utilised a number of sources of capital
operations of the business is key. to supplement cash generated from operations, through
the bond issues in January 2011 and in February 2012
and an equity placing in July 2011. The Group will
continue to optimise its capital structure during
2012 to provide further financial flexibility to fund
the Group's operational requirements.
* The Group continues to manage its expenditure and
monitor cash flows to ensure that future cash
requirements are appropriately controlled.
-------------- ------------------------------------------------------------ ------------------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCBKPDDABKDFQB
Afren (LSE:AFR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Afren (LSE:AFR)
Historical Stock Chart
From Apr 2023 to Apr 2024