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AFR Afren

1.785
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Afren LSE:AFR London Ordinary Share GB00B0672758 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 1.785 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Afren PLC Annual Financial Report (9217L)

30/04/2015 4:37pm

UK Regulatory


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TIDMAFR

RNS Number : 9217L

Afren PLC

30 April 2015

Afren plc (AFR LN)

Annual Financial Report

London 30 April 2015 Following the release of Afren plc's ("Afren" or the "Company") full year results for the year ended 31 December 2014 (the "Results"), the Company announces it has published its Annual Report and Accounts for 2014 (the "Annual Report and Accounts").

The Company's 2015 Annual General Meeting will be held at the offices of White & Case LLP, 5 Old Broad Street, London, EC2N 1DW on Thursday 25 June 2015 at 11.00 am. Copies of the Annual Report and Accounts 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 Results 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, a copy of the Annual Report and Accounts 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 Tel: +44 20 7864 3700

Simon Hawkins, Group Head of Investor Relations

Bell Pottinger (public relations adviser to Afren plc) Tel: +44 20 7772 2500

Gavin Davis

Henry Lerwill

Appendix A: Directors' Responsibility Statement

The following Directors' Responsibility Statement is extracted from page 104 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, 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;

2. The strategic 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; and

3. The annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

By order of the Board

Toby Hayward

Interim Chief Executive

30 April 2015

Appendix B: Principal Risks and Uncertainties

The following description of principal risks and uncertainties is extracted from pages 26 to 29 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 2014.

 
       Key risk             Description and impact                       How we manage it 
------------------------  --------------------------------------------  ------------------------------------- 
       Operational risk 
----------------------------------------------------------------------  ------------------------------------- 
Field delivery 
 risk                      Field delivery risk applies to all            All operations are subject 
                           phases of the E&P cycle from seismic          to risk reviews, to identify 
                           acquisition through to production             as early as possible any 
                           operations. At each phase the mitigating      potential risks to success. 
                           measures will be different. However, 
                           failure to control risks will lead            Our engineers analyse results 
                           to project delays, cost over-runs,            from appraisal and development 
                           high production costs, early field            wells, and determine the 
                           decommissioning and, ultimately,              appropriate course of action 
                           lower than expected reserves.                 for the drilling programme 
                                                                         and facility design. 
                           In 2014, Afren encountered operational 
                           delays which impacted the timing              We closely monitor all projects 
                           of production ramp-up at both Ebok,           to ensure they go to plan 
                           with the installation of the Ebok             and so we can take action 
                           CFB extension facilities, and OML             to maintain progress. 
                           26, due to the declaration of Force 
                           Majeure at the Forcados Terminal              We monitor project finances 
                           in Q1 2014. In January 2015, Afren            alongside their budget to 
                           announced its intention to review             minimise over-runs. 
                           its strategic options in respect 
                           of the Barda Rash PSC, following              We monitor production operations 
                           disappointing operational performance         closely to ensure we minimise 
                           at the field and an updated reserves          unplanned downtime and control 
                           assessment from RPS Energy.                   operating costs tightly. 
 
                           The maintenance of good working               We compare actual production 
                           relations with our Partners is also           regularly to forecast production. 
                           critical to field delivery. Without 
                           this we face potential delays to              We hold regular technical 
                           projects, issues with funding and             and operating meetings with 
                           disagreement on how best to develop           our Partners to keep them 
                           our portfolio.                                fully appraised of developments 
                                                                         and to get their input and 
                                                                         agreement on key issues. 
------------------------  --------------------------------------------  ------------------------------------- 
Exploration                                                             Exploration assets are subject 
 failure                   Exploration activities can be capital         to a rigorous peer review 
                           intensive and may involve a high              process. 
                           degree of risk. Sustained exploration 
                           failure will affect the Group's growth        We evaluate exploration 
                           potential.                                    risk 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. 
                                                                         We subsequently rank prospects 
                                                                         and approve budgets. 
------------------------  --------------------------------------------  ------------------------------------- 
Environmental 
 or safety                 There is a continuing focus on preventing     We have implemented comprehensive 
 incidents                 major pollution or loss of life due           EHSS management systems based 
                           to failure of systems, equipment              on best industry practice, 
                           or human action.                              at both corporate and country 
                                                                         level, with an annual independent 
                                                                         audit programme to ensure 
                                                                         effective implementation. 
 
                                                                         Afren oversees its contractors 
                                                                         closely to ensure they accept 
                                                                         and meet our EHSS standards. 
                                                                         Specific EHSS teams in each 
                                                                         area of operation. 
                                                                         Contingency plans in place 
                                                                         and tested regularly. 
------------------------  --------------------------------------------  ------------------------------------- 
Unfulfilled 
 work or PSC obligations   Loss of production interest or exploration    The operations, finance 
                           licence due to incomplete fulfilment          and legal teams jointly monitor 
                           of work or PSC obligations.                   compliance with licence obligations. 
 
                                                                         We maintain good, open working 
                                                                         relationships with local 
                                                                         governments in the countries 
                                                                         of operation. 
------------------------  --------------------------------------------  ------------------------------------- 
External risk 
------------------------  --------------------------------------------  ------------------------------------- 
Geo-political             The countries in which Afren operates         Through close liaison in 
 risk                      continue to face political, socio--economic   each relevant country, we 
                           uncertainties.                                monitor the 
                                                                         situation from the perspective 
                           2014 saw particular problems with             of our safety and security. 
                           Boko Haram in northern Nigeria and            Contingency plans in place 
                           the rise of Islamic State in Iraq.            and tested regularly. 
                           Whilst these issues received wide 
                           international media coverage our operations   Through our contacts in 
                           were not directly affected and we             governments and industry, 
                           continue to monitor the situation             as well as 
                           closely.                                      though specialist advisors, 
                                                                         we continuously monitor and 
                           2015 will see elections in Nigeria            evaluate 
                           and we will be conducting a rigorous          the potential impacts on 
                           business risk assessment of the potential     our business arising from 
                           impacts that may arise.                       changes in the geo-political 
                                                                         environment. 
------------------------  --------------------------------------------  ------------------------------------- 
Security                  Afren continues to operate in regions         Security teams in each area 
 incidents                 where kidnapping, piracy and criminal         of operation. 
                           attacks occur.                                Rigorous security management 
                                                                         programme. 
                                                                         Security risk assessments 
                                                                         for each asset and operation. 
------------------------  --------------------------------------------  ------------------------------------- 
Oil price                 Oil prices can fluctuate significantly. 
 volatility                                                              In Q4 2014, we liquidated 
                           In 2014, the Group hedged approximately       our hedge position, which 
                           35% of production through the use             benefited from the lower 
                           of financial instruments.                     oil prices in the second 
                                                                         half of the year, to generate 
                                                                         cash. 
------------------------  --------------------------------------------  ------------------------------------- 
Host 
 community                 Our operations both on and offshore           Afren has a tried and tested 
 action                    have the potential for interruption           system for managing community 
                           by our host communities if relations          affairs, which is applied 
                           are not well established.                     to all operations. 
                                                                         Community affairs teams are 
                           We have continued our close relationships     in place where required. 
                           with our host communities and have            Contingency plans in place 
                           seen no community action against our          and tested regularly. 
                           operations in 2014. 
------------------------  --------------------------------------------  ------------------------------------- 
Strategic risk 
------------------------  --------------------------------------------  ------------------------------------- 
Bribery and corruption    As an international oil and gas operator,     We conducted a comprehensive 
                           bribery and corruption represent an           anti-bribery and corruption 
                           ongoing risk to our business.                 risk assessment during 2014. 
                                                                         This work was integrated 
                                                                         into the review and update 
                                                                         of the Code of Business Conduct 
                                                                         that was completed towards 
                                                                         the end of the year. The 
                                                                         new Code was approved by 
                                                                         the Board in December and 
                                                                         all staff and contractors 
                                                                         underwent on-line training 
                                                                         and testing on the requirements 
                                                                         of the Code. 
 
                                                                         We have established an independent 
                                                                         whistle-blowing hotline to 
                                                                         enable concerns about poor 
                                                                         practice to be voiced without 
                                                                         fear of reprisal. 
 
                                                                         We review and update specific 
                                                                         Anti-Bribery and Corruption 
                                                                         policies and procedures annually 
                                                                         and quarterly respectively, 
                                                                         to meet the stringent requirements 
                                                                         of the UK Bribery Act as 
                                                                         well as the UK Ministry of 
                                                                         Justice Guidance. 
 
                                                                         We provide new starters 
                                                                         and existing employees with 
                                                                         training on anti--bribery 
                                                                         and corruption as part of 
                                                                         the induction process and 
                                                                         as an ongoing programme. 
 
                                                                         We provide quarterly updates 
                                                                         to the Audit and Risk Committee 
                                                                         regarding anti-bribery and 
                                                                         corruption, including any 
                                                                         whistle-blowing reports and 
                                                                         their subsequent resolution. 
------------------------  --------------------------------------------  ------------------------------------- 
Management                Management of growth is a reducing            All acquisitions are subject 
 of growth                 risk following the fall in oil price          to thorough due diligence, 
                           and the slowing of Company expansion.         to create an effective integration 
                                                                         plan. 
 
                                                                         We design remuneration policies 
                                                                         to incentivise, motivate 
                                                                         and retain key employees 
                                                                         as well as to attract new 
                                                                         personnel as required. 
------------------------  --------------------------------------------  ------------------------------------- 
Loss of key employees     Loss of knowledge and skills to the           We consider succession planning 
                           Group, in particular in countries             Group-wide, taking into account 
                           of operation.                                 the development of the executive 
                                                                         and senior management. 
 
                                                                         We design remuneration policies 
                                                                         to incentivise, motivate 
                                                                         and retain key employees 
                                                                         including Directors. 
 
                                                                         We set salaries and reward 
                                                                         of senior executives, including 
                                                                         Directors, at competitive 
                                                                         levels using third party 
                                                                         benchmarks. 
------------------------  --------------------------------------------  ------------------------------------- 
Climate                   Greenhouse gas (GHG) emissions contribute     We recognise the potential 
 change                    to climate change. Important stakeholders     impact that energy use and 
                           expect Afren to have a strategy and           GHG have on climate change 
                           meaningful reduction targets (flaring         and to seek to reduce emissions 
                           represents over 50% of Afren's current        associated with flaring: 
                           GHG emissions). 
                                                                         We monitor energy use and 
                           Failure to address this issue risks           ensure energy efficiency 
                           reputational damage and issues with           in all operations. 
                           the Company's shareholders. 
                                                                         We monitor and report other 
                           This also represents an opportunity           atmospheric emissions. 
                           for Afren to demonstrate a forward 
                           looking approach in comparison to             We have developed and disclosed 
                           its peers.                                    a comprehensive climate change 
                                                                         strategy and will identify 
                                                                         engineering solutions to 
                                                                         reduce flaring and set flaring 
                                                                         reduction targets for 2015. 
------------------------  --------------------------------------------  ------------------------------------- 
Financial risk 
------------------------  --------------------------------------------  ------------------------------------- 
Taxation                  There is a risk that changes in tax           Our financial and legal teams 
 and other                 regimes and other legislation may             monitor current legislation 
 legislation changes       affect our financial results. As detailed     and proposed changes and 
                           in the financial statements, there            incorporate these into our 
                           are uncertainties surrounding the             working practices. 
                           taxation treatment of marginal fields 
                           (see note 4.8: Contingent liabilities)        Maintenance of good, open 
                           and Pioneer status (see note 5.16:            working relationships with 
                           Post balance sheet events - Company           local authorities in the 
                           and Group) in Nigeria.                        countries of operation. 
 
                                                                         Involvement with industry 
                                                                         groups in the country of 
                                                                         operation to discuss sector 
                                                                         issues. 
------------------------  --------------------------------------------  ------------------------------------- 
Treasury management       The availability of financing to maintain     The Group is currently in 
                           the ongoing operations of the business        the process of financial 
                           is key.                                       restructuring in order 
                                                                         to provide liquidity and 
                                                                         improved financial stability 
                                                                         for the Group's ongoing operations. 
------------------------  --------------------------------------------  ------------------------------------- 
 

Appendix C: Related Party Transactions

Details of related party transactions for the year ended 31 December 2014 were disclosed in the results announcement issued on 30 April 2015.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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