March 4, 2009 / 3:10 PM / 9 years ago

UPDATE 2-Addax Petroleum Q4 profit falls 98 percent

* Q4 profit down 98 pct

* Sees 2009 capex of about $1.6 bln

* Plans to spend 60-70 pct of capex in H1 ‘09 (Recasts; adds conference call details, analyst’s comment) By R. Manikandan

BANGALORE, March 4 (Reuters) - Africa- and Middle East- focused oil and gas firm Addax Petroleum Corp AXC.TO on Wednesday posted a 98 percent drop in its fourth-quarter profit, hurt by a sharp fall in crude oil prices.

However, oil prices, which rose more than 7 percent on Wednesday, are driving the company’s stock price higher, analyst Martin Molyneaux with First Energy Capital told Reuters.

Shares of the company were up 3.27 percent at C$23.03 on the Toronto Stock Exchange.

Assuming a Brent crude price of $60/bbl, Addax Petroleum plans to spend about 60 to 70 percent of the total expected capital expenditures of $1.6 billion in the first half, the company said in a conference call.

The company forecast total production to average between 140 million barrels per day (Mbbl/d) and 145 Mbbl/d for 2009 from its Nigeria and Gabon operations.

If the average Brent crude price reaches $40/bbl, the company said it would cut its capital expenditure to about $1 billion resulting in total production for 2009 averaging between 132 Mbbl/d and 137 Mbbl/d.

“If the oil strengthens in the second half, the company may revise the target upwards,” analyst Rafi Khouri with Raymond James said, adding that the official Raymond James oil price forecast for 2009 is $43.

Net income for the quarter was $3 million, or 2 cents per basic share, compared with $180 million, or $1.16 per basic share, a year ago.

Addax’s average realized sales price for the quarter fell 44 percent to $49.28 a barrel, hit by a 38 percent drop in the average dated Brent benchmark price for crude oil.

Oil prices have tumbled more than $110 a barrel from the peaks hit last year as the economic downturn has spread to all regions of the world, cutting energy consumption.

Cash flows from operating activities was $1.52 billion for 2008, up from $742 million last year.

“Cash flow came in stronger than what I was looking for,” Khouri added. (Editing by Himani Sarkar, Dinesh Nair)

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