24-05-02 Oil and gas group Energy Africa expects to spend about $ 130 mm on exploration and development of existing fields this financial year, up from $ 100 mm in the year to March. It could raise a second $ 50 mm tranche of debt to finance these programmes.

Reporting a 21 % increase in average production to 21400 bpd of oil and 2 % rise in operational cash flow to $ 96 mm for the period under review, MD Rhidwaan Gasant said this was achieved despite an 18 % lower average realised oil price and temporary decline in production in Equatorial Guinea that pushed up unit costs. These rose to $ 4,49 a barrel from $ 3,87 previously, a result of having to switch production in the Ceiba field to a larger floating production and storage vessel, the Sendje Ceiba. However, Gasant says he expects costs to fall back below the $ 4 a barrel industry benchmark this year.
Net book value a share had jumped to 160,9 cents on a diluted basis at year end, from 142,4 cents last year, and turnover was 4 % higher at $ 144 mm, but the higher operational costs squeezed operating income to $ 34 mm from $ 43 mm previously, and net income declined to $ 21 mm from $ 25 mm

Energy Africa, which is controlled by Malaysian state oil company Petronas via a majority stake in oil refiner Engen, drilled 18 exploration and appraisal wells during the 2001-02 financial year, achieving a 72 % success rate. Five consecutive discoveries in Equatorial Guinea helped push potential commercial oil reserves up 118 % to 37-mm barrels, while commercial reserves were 22 % higher at 58-mm barrels by year end.
On the downside, the Kudu-6 appraisal well off the coast of Namibia was found to be dry, resulting in plans for a floating LNG plant being shelved. The block 9 well in Angola also failed to find oil and the permit was relinquished.

Commenting on the Kudu project, in which Energy Africa has a minority interest with Shell as operator, COO Adrian Nel said there was "still potential for very big reserves" of natural gas, and a seventh appraisalwell would be drilled in an attempt to increase proven reserves from 1,3-tcf of gas to at least 2-tcf.