Afren Plc, a U.K. explorer of oil in Africa and northern Iraq, rose the most in more than two months in London after making tax savings in Nigeria that will help fund increased investment at the Ebok oilfield in the country.
Afren climbed as much as 5.7 percent on Jan 28, the biggest intraday gain since Nov 19, and rose 4.7 percent to 151.70 pence by 9:32 a.m., the best performance on the FTSE All-Share Index.
“We expect to benefit from a significant improvement in terms covering historical liabilities and those arising through to mid-2016” after clarification of the tax position at Ebok, the London-based company said in a statement.
Afren plans to raise total project investment 23 percent to about $845 million this year over 2013, with about 70 percent for Ebok, “taking advantage of anticipated cash tax savings,” Bank of America Corp. wrote Tuesday in an e-mailed report.
The company expects to produce about 40,000 barrels of oil a day, net to the business, down from 47,112 barrels last year, partly as it installs a platform at the Nigerian oilfield.
Capital expenditure will be “comfortably covered” by this year’s cash flow, Morgan Stanley wrote in a report. Bank of America and Morgan Stanley serve as brokers for Afren.
