AFRICA-focused oil and gas company, Afren, said production operations at a key field in Nigeria have started, giving it confidence it would reach its output targets this year.Afren said oil production from its Ebok project started in February, behind its earlier goal of October, but in line with guidance it gave in December, as it confirmed it was on track to produce 40,000 barrels of oil equivalent per day in 2011.Well reach 15,000 barrels a day from the first phase during the course of April and 35,000 barrels a day by the end of the second quarter, said Chief Executive Osman Shahenshah in an interview on Tuesday.Shares in Afren, which have risen 54 per cent in the last twelve months, outperforming the European oil and gas index by 49 per cent, were up 4 per cent to 170.3 pence at 0921 GMT.Afrens 2010 results provided a strong indication of the solid growth path that the company enjoys both in terms of production and exploration, said analysts at Bank of America Merrill Lynch, which acts as broker to the company.The company, whose main assets are in West Africa but in 2010 also expanded into the east of the continent, said it continued look for acquisitions and was in the running to buy a number of Nigerian oil blocks from Shell.We have a dialogue with Shell and were talking about a number of [Nigerian] assets to Shell, Exxon, Chevron and others, said Shahenshah.Were looking for larger opportunities generally speaking, .weve got over $700 million of resources right now so were in a financially strong position.Shell, which last year sold its interest in one oil field to Afrens Nigerian subsidiary, is believed to be close to selling its stake in four more Nigerian onshore oil blocks.Afren said it planned to drill a number of exploration wells in 2011 at locations in Kenya, Madagascar and Ghana.The company said earlier in March it agreed a deal with Italian oil major ENI to jointly explore its Keta block in Ghana, and a well was scheduled for the third quarter, said Shahenshah.This deal allows Afren to crystallise value in an asset historically neglected by the market, said Bank of America Merrill Lynch analysts said.The company swung to a profit after tax in 2010 of $45.9 million from a loss of $16.8 million in 2009, its maiden profit on this basis, missing a $68 million consensus forecast from a poll of analysts supplied by the company.On a pretax basis, the companys profit of $78.8 million missed a consensus forecast of $143 million from a Thomson Reuters I/B/E/S poll of ten analysts, after output from its Okoro field in Nigeria fell to 16,055 barrels of oil per day in 2010 from 18,800 in 2009.
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