Strong cost control and financial discipline
A strong, focused management team delivering stakeholder value
The economic climate in 2009 presented challenges across all industries – and the oil and gas sector was no exception. Commodity prices were highly volatile and the credit environment difficult.
Afren responded, and demonstrated resilience to the economic downturn, driving greater efficiences in every possible aspect of the business, cost savings were made at all levels and a substantial portion of debt was repaid during the year.
The results of Afren’s cost reduction initiatives helped enhance the normalised profitability of the business in 2009. We drove down average field operating costs to just US$11.6/boe, from US$29.7/boe in 2008. We also reduced administrative expenses from US$32.5 million in 2008 to US$27.2 million.
Also during the period we substantially strengthened the balance sheet, ending the period with a net cash balance of US$54 million and having reduced gearing to zero (from 82% at the start of the year). With an additional up to US$450 million RBL facility secured
on Ebok reserves, we have the capital structure and reserves to deliver our work programme in 2010.
