Afren cut estimated reserves at a Kurdistan oil well by 80% and is deciding what to do with the field.
Afren “will now consider our strategic options for Barda Rash,” the London-based company’s Interim CEO Toby Hayward said in a statement. “We will continue to focus on our core portfolio in Africa and allocate capital to our highest cash-return projects.”
The disappointing results follow turmoil in Afren’s management. The company fired former CEO Osman Shahenshah and COO Shahid Ullah in October for “gross misconduct” after an investigation into unauthorized payments. It was also hit by oil’s 46% drop last year.
“Such a material downgrade once again casts a shadow on operational capabilities of the company in its current state and its previous disclosures in respect of their assets,” Jamal Orazbayeva, an analyst at Westhouse Securities, said in a note to investors.
Afren is subject to a “highly preliminary” approach from Nigerian oil producer Seplat Petroleum Development Co. to merge the companies, it said on Jan. 8. Afren expected to produce as many as 36,000 bbl/d of oil in 2014, mainly from Nigeria, it said in November.
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