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UK-based explorer Afren (AFR:AIM) continues to build on its position in West Africa, gaining first production and increasing its reserve base with a $205 million ‘step change’ deal for Devon Energy’s assets in Ivory Coast.

The debt-financed acquisition increases the company’s 2P reserve base by two-thirds to around 70 million barrels of oil or equivalent – it also offers production of 3,000 barrels a day. The company, which has former Opec chief and current adviser to the Nigerian government Dr Rilwanu Lukman, as its chairman, has managed to grow quickly. This addition offers exposure to a new country and takes the total portfolio to 17 assets in seven countries in less than three years

Chief executive Osman Shahenshah, says: ‘This material transaction, which follows on from our acquisition of Devon’s assets in Ghana and Angola, represents a step change addition to Afren’s existing portfolio.

Shahenshah also pointed to the immediate production that the deal promised ahead of first output from the Okuru Setu marginal field development in Nigeria – expected to come on stream in April.

Keith Morris, analyst at brokers Evolution Securities, describes it as ‘A transformational deal in line with the consistent strategy of the group – bringing first production, and rolling out the low risk operating model with local partners across West Africa.’

The share price ticked up to around 135p in response but has since slipped back, closer to 125p, after some profit taking.

The deal with Devon follows the signing, earlier this month, of two production sharing contracts for licences in the gas rich Anambra basin in Nigeria. The area is largely unexplored and appraisal drilling is expected to be underway by next year, following the acquisition of seismic data. In January the company entered into a joint venture with German energy giant E.ON with a view to eventually building an LNG plant in Nigeria.