< "> edit this post http://www.investegate.co.uk/afren-plc-%28afr%29/rns/trading-statement-and-operations-update/201301210700069619
http://www.investegate.co.uk/afren-plc--afr-/rns/2012-full-year-results/201303250700107200A/

In an attempt to cut down the header page,i've transferred some of the older news to Page1 post No.3.

http://www.oil-price.net/index.php?lang=en
http://www.ft.com/home/uk

http://www.investegate.co.uk/Article.aspx?id=201111020700081674R
http://www.investegate.co.uk/Article.aspx?id=201111150700250723S
http://www.investegate.co.uk/Article.aspx?id=201112010705051251T
http://www.investegate.co.uk/Article.aspx?id=201201170700146472V
http://www.investegate.co.uk/Article.aspx?id=201201230701479690V
http://www.moneyam.com/action/news/showArticle?id=4323758
http://www.investegate.co.uk/Article.aspx?id=201204170700164488B
http://www.investegate.co.uk/Article.aspx?id=201205140700212304D
http://www.investegate.co.uk/Article.aspx?id=201205210700407032D
http://www.moneyam.com/action/news/showArticle?id=4430164
http://www.investegate.co.uk/afren-plc-%28afr%29/rns/significant-new-seychelles-3d-seismic-programme/201212120700052973T/
http://www.investegate.co.uk/afren-plc--afr-/rns/2013-half-yearly-results/201308230700063334M/
http://www.investegate.co.uk/afren-plc--afr-/rns/ogo-drilling-and-resources-update/201311190700083404T/
http://www.investegate.co.uk/afren-plc--afr-/rns/trading-statement-and-operations-update/201401280700096280Y/
http://www.investegate.co.uk/afren-plc--afr-/rns/interim-management-statement/201405200700135209H/
http://www.investegate.co.uk/afren-plc--afr-/rns/interim-management-statement/201410300700116483V/
http://www.moneyam.com/action/news/showArticle?id=4942625
http://www.moneyam.com/action/news/showArticle?id=4943375

Monday 25 March is results day.

Oil boss Tony Hayward's description of his latest venture sounds like it could be drilling for oil in rural England rather than northern Iraq.

"It's fairly benign - it's gentle rolling countryside," the former BP chief executive says.

"The distances are short and the operating environment is safe and secure. It's pretty straightforward and it's pretty low-cost."

Genel Energy, the Anglo-Turkish company Mr Hayward now heads, has been in the semi-autonomous Kurdistan region of Iraq since 2002.

And like the 50 or so other foreign firms operating there, it was attracted by vast potential energy reserves and a Kurdish government that has welcomed investors with production contracts far more generous than those offered by Baghdad in the south.

But, caught in a dispute between politicians in the regional capital Irbil and those in the country's capital Baghdad, many of these investors - including Genel - say they have not been paid for much of the oil they send abroad.

As a result, since December exports from Kurdish Iraq have ceased - the latest in a line of such stoppages.
Stalemate

Oil underpins Iraq's economy, making up more than 95% of its budget revenues, and is fundamental to paying for the country's reconstruction after the sanctions, war and neglect of Saddam Hussein's regime.
Continue reading the main story
“Start Quote

Clearly we'd rather be working in an environment where there wasn't that sort of dialogue or row going on, but despite all of that you have to look at enormous improvement on the ground”

Tony Hayward Genel Energy

Under the country's revenue-sharing scheme, more than 80% of the money from Iraq's international oil sales goes to Baghdad, with 17% going to the Kurds. All exports go through a pipeline controlled by the federal government, with Baghdad collecting the revenues for distribution.

But after changes to the way the central government calculates payments to operators, Kurdistan says it has not received enough money to pay the companies working in Kurdish Iraq. And with the country yet to establish a hydrocarbon law to settle disputes, things have hit a stalemate.

This escalated earlier this month, when Iraq's delayed 2013 budget was eventually passed in the absence of Kurdish politicians. Less than $650m (£430m) has been set aside for oil companies in the north, just a fraction of the $3.5bn (£2.3bn) that Irbil had said it needed to cover the shortfall.

"This latest passage of the budget law has angered the Kurds and you wonder how they're going to resolve it," says Kate Dourian, Middle East editor at energy specialist Platts.

"They had a lot of discussions before the parliament, they couldn't reach an agreement and then the budget law was passed regardless.

"The gap between the two sides is now wider than before."

And, Ms Dourian told the BBC, this poses problems for international oil firms who rely on exports for their profits.

"They are shipping a little bit to Turkey [by road] and some of it's being sold to the local market, obviously at much below market rates," she says.

"So you wonder just how long they can hang on in there."
'Saner heads'

Despite this bleak assessment, Mr Hayward appears more relaxed.

He says his firm's output of 80,000 to 100,000 barrels a day for the domestic market is enough to create a "robust" business, though he admits this could grow by up to 50% if Genel were exporting.

"Clearly we'd rather be working in an environment where there wasn't that sort of dialogue or row going on, but despite all of that you have to look at enormous improvement on the ground," he told BBC World's Middle East Business Report.
Worker in an oil field in Kurdish Iraq Iraq has the world's fourth-largest oil reserves, says Opec

"To realise the full potential of the Kurdistan oil and gas - for the benefit of all Iraqis and for the benefit of Kurdistan and for the benefit of the contractors who are invested - clearly it would be much better if the oil was being exported.

"I believe that at some point in the not too-distant future saner heads will come to the table and there'll be an agreement.

"We're going to get to a place where people realise this is too big an opportunity for all of Iraq."
'Vocal investors'

If all this was purely about Iraq's overall oil production volumes, then the stoppage in exports from Kurdistan might not be such a big deal. Last year little more than 10% of Iraq's average of 3.2m barrels of oil a day came from Kurdish areas.

This means that security threats, deeply entrenched corruption and unattractive investment terms, all factors in the south blamed for muted interest in Iraq's last round of exploration licence auctions, are hurting efforts to ramp up production more than a stoppage of Kurdistan's exports, say analysts.

Instead, some industry experts believe that Baghdad's concerns about Kurdistan's oil policy run much deeper, with Baghdad fearing it threatens Iraq's fragile federation - especially if other provinces with deep oil reserves develop their own aspirations to self-rule.

"Kurdistan gets a lot of attention because you have foreign companies there who are vocal, there are investors who like to talk about it," says Robin Mills, head of consulting at Manaar Energy.

"And of course for Kurdish people, oil revenue is the basis that Kurdistan can be autonomous and perhaps could be an independent state at some point.

"So while economically the south is far more important, politically Kurdistan is very important because who controls oil in Iraq goes to the very heart of Iraq as a united entity."
'Key player'

Baghdad insists that the Kurdistan Regional Government (KRG) has no right to sign exploration deals with foreign companies.
A Kurdish flag in the old centre of Irbil, the capital of Iraq's autonomous Kurdish region Iraq hopes to be exporting 6m barrels of oil a day by 2017

But those firms have gone ahead regardless. Most significant of these has been ExxonMobil, which was already developing the West Qurna-1 field in southern Iraq - prompting Baghdad to threaten to revoke ExxonMobil's contract there.

But these threats have not been carried out, and since then other oil majors including Total and Chevron have also entered Kurdistan.

If a much-talked-about pipeline ever came to fruition that allowed Kurdistan's oil to be exported to Turkey - bypassing the Baghdad-controlled route - the political ramifications in the region would far outweigh the row between northern and southern Iraq.

And stability in Iraq's oil sector goes far beyond Iraq's people, says Mr Mills.

"Iraq is one of the key players - perhaps the key player - in the global oil market in the next decade.

"Whether Iraq succeeds in expanding its production determines whether the oil market is going to be relatively well-supplied and prices are lower, or whether we're going to have another decade of high oil prices," he says.
http://www.bbc.co.uk/news/business-21793783

http://www.investegate.co.uk/afren-plc--afr-/rns/tr-1-notification-of-major-interest-in-shares/201303200700273984A/

Gone above 5%/

http://www.youtube.com/watch?v=rSkesuqGbNM

Recommended acquisition of 10.4% of First Hydrocarbon Nigeria
London, 25 March 2013 - The Board of Afren plc ("Afren" or the "Company") announces that CBO Oil and Gas FHN Investment Service Vehicle Limited ("COGIL") has exercised the terms of an amended put option agreement which will result in Afren owning a beneficial interest in a majority of the issued share capital of First Hydrocarbon Nigeria (the "Acquisition")

Transaction Highlights
· Under the terms of the put option Afren will acquire a beneficial interest in 15 million shares in First Hydrocarbon Nigeria Company Limited ("FHN")

· Following the acquisition Afren will have a beneficial interest in 54.8% of the issued share capital of FHN

· This will result in a material change in 2P reserves net to Afren

o Group pro forma net Proved and Probable Reserves to increase from 210 mmboe to approximately 270 mmboe.

o Assuming Completion, Afren will therefore increase its net Proved and Probable Reserves by 29%

Transaction Terms
· Afren will acquire a beneficial interest in 10.4% of the issued share capital of FHN in exchange for an aggregate consideration of US$37.05 million under the terms of the put option, payable in cash

· FHN will remain as an indigenous Nigerian oil and gas company

· The Acquisition will be subject to the approval of Afren's shareholders.

Record financial results; strong production performance; significant exploration success contributing to reserves upgrade

25 March 2013 - The Board of Afren plc ("Afren" or "the Group") announces results for the year ended 31 December 2012

Key highlights
· Record financial results driven by strong production growth (+123%); FY 2013E net production expected to average 40,000 to 47,000 boepd (excluding Barda Rash)

· Significant exploration success

- E&A success ratio of 88%

- 265% reserves replacement ratio - net working interest 2P reserves addition of 39 mmbbls (gross 76 mmbbls and excluding Ain Sifni) to 210 mmboe

· Group pro-forma net 2P reserves expected to increase to approximately 270 mmboe after consolidation of OML 26 reserves

- following exercise of a put option by a third party over FHN shares (subject to shareholder approval)

· Multi-well E&A drilling campaign targeting Pmean resources of 650 mmboe

- Okwok appraisal success confirms management view of 52 mmbbls gross recoverable reserves (net working interest 29 mmbbls)

- Simrit-3 well confirms eastern extent of anticline

· Strong balance sheet

- net debt, excluding finance leases US$488 million (31 December 2011: US$548 million)

- US$300m senior secured Ebok facility signed (post period end), replacing the existing Ebok RBL facility. Pro-forma net debt unchanged

· Repeatable strategy - continue to create significant shareholder value

http://www.moneyam.com/action/news/showArticle?id=4560755

From Mr Poshman
Has anyone else listened to the conference call. I have listened to it on playback and its well worth a listen. I skipped over a few bits but in general it was really good. I always like listening to the Q&A as it highlights areas that I may have missed or I would like to know about. Most of the below is from the Q&A and its all good stuff I think.

In Osman's summary he was talking about value being driven by the business, and he mentioned about Nigeria (Ebok and Okoro) where the assets were acquired for upto $2 / bbl but were now worth over $20 / bbl based upon cash returns. This is great news as $20 / bbl over the 2P reserves on Ebok and Okoro is close to the value of the company!!

He mentioned value in East Africa being shown by buying al the assets at $105m and there being interest from the market to buy assets for greater than this. Galib Virani also mentioned this through the Q&A session.

Q&A - I have tried to group together into segments

Kurdistan
They were asked about whether they were looking at early monetisation of Kurdistan (ie. disposals) but said they wanted to see Ain Sifni through and Barda Rash would start monetising through the sale of oil, so it sounded like any asset sale is off the table, Osman did mention that they were open to offers, but they would be assessed as to whether greater shareholder value could be generated through keeping or disposing, so I guess if they got an offer they couldn't refuse then they would sell the assets (i guess they would say that about any assets though).

Crude sales have not been locked in, talking with the KRG and hopefully will have an update in the next month or 2.

Light oil being worked up now out of BR, heavy oil will follow but sounded like they would need to use different pipelines.

Maqlub does not appear to be connected to BR but in the same system. Hunt have a quoted estimate of 230m barrels recoverable for the prospect.

They were asked about the quality of the oil (ie. light / heavy oil). The understanding at the moment is that the heavy oil split at Simrit is likely to be similar to BR, so around 1/3rd light oil. The 21 degree API oil stated in the 2nd set of flow tests on Simrit-2 will flow and would be developed with the light oil, they are expecting a production rate of around 6kbopd from these jurassic zones. The heavy oil that will need to be extracted and transported seperately is in the Cretaceous.

2P reserves on Ain Sifni won't be until at least the end of the year as they need to incoporate the testing from both Simrit-2 and Simrit-3.


East Africa
Only just started looking for the Tanga rig as only just finalised that they want to drill the deeper zones. Likely to spud Tanga towards the end of the year. Interest in Tanga and East Africa assets but no cashflow requirement to farmout, they would do so on favourable terms though. Tanga well will likely cost around $65m.

Actively looking for a rig for Madagascar but nothing yet been sourced.

They were asked about the security in Ethiopia, they have a rig contracted and the operator has not stated that drilling will be delayed so happy that the timelines will be met.

Nigeria
OML115 well to be spudded in around a month, as the rig will drill the Ufon prospect after completing testing on Okwok-11. OPL310 will likely be in June using Adriatic-9 rig.

OPL310, options around a partnership are available but like Tanga no cashflow requirement to do so, so only on favourable terms.

OML26 - Afren have no exposure to FHN debt.

Okwok FDP will be completed in 2013, mentioned that full cycle is around 22 months so I would expect development to be complete around the start of 2015.

3C Ebok reserves are related to the recovery factor mainly. Reservoir performance at Okoro has been at the high end of expectations and Ebok looks the same. 2P is usually based on 20-25% recovery factor but Okoro is going to be closer to 45 to 50%.

Okoro 2P is based on the

per my comment on ftse thread, i have just topped up (again) at 132.3

Hmmm....a tad early cynic, but tricky now to decide where the support is.

At a guess 131 with a target of 185 over 12mths.

(Edit)

cynic unlucky call, Brent down to $104/105.

i think so too, but more than made up (and then some!) by dow short - see ftse thread

cynic are you still in or have you dumped as oil price falls?

certainly still here ..... in fact, this position is still barely below b/e ..... i rather like this one, as you will have gathered, so regard it more as a true stock holding rather than a trading cfd

cynic any view on the oil price over the next 6 months, AFR sp slipping away.

us light crude is still $88.50 and that is the standard to look at.
however, the real key is surely that the world continues to consume more oil than discoveries replace, notwithstanding that advancing technology is allowing higher recovery rates.
it follows that companies with significant proven reserves/assets are at a premium .... these will either poodle along doing really quite nicely thank-you or, more likely, will be snapped up sooner or later by a larger player

MARKET REPORT: Alluring oil explorer Afren tempts puntersBy Geoff Foster
PUBLISHED: 01:08, 1 May 2013 | UPDATED: 01:08, 1 May 2013
Comments (1) Share
..Not for the first time in recent months, professional punters were suddenly mad about Afren. Shares of the Africa-focused oil explorer gushed 7p to 134.1p on revived talk of a £2.1bn, or 195p a share, cash offer from Exxon Mobil, the world’s largest energy company.

Afren is attractive as it has a good mix of production and exploration and its geographical footprint ranges from its Nigeria roots across Ghana and Kurdistan. Analysts say it offers exposure to some of the most exciting prospective areas in the world.

Afren has an active exploration drilling campaign underway and expects final results from the Jebel Simrit-2 testing programme in Kurdistan during May. It has plans to drill 14 wells during 2013, including four key wells across East Africa.

All the major oil and liquefied natural gas groups are looking to acquire assets in the East African region. ExxonMobil, the largest of the world’s supermajors with daily production of 3.921m barrels of oil equivalent, has the financial clout to swallow Afren with loose change.

http://www.thisismoney.co.uk/money/markets/article-2317249/MARKET-REPORT-Alluring-oil-explorer-Afren-tempts-punters.html

StockMarketWire.com
Afren has completed the farm out agreement with Lekoil on the OPL 310 licence, located offshore Nigeria.

Afren will receive a total carry of up to $50m in respect of an exploration well currently being drilled at the Ogo prospect and a planned side-track well.

The indigenous Nigerian company Optimum Petroleum Development, the named Operator on the block, will continue to hold a 60% participating interest, with Afren providing technical assistance to Optimum.

Interim Management Statement

London, 16 May 2013 - Afren plc ("Afren" or the "Group"), announces its Interim Management Statement and financial results for the three months ended 31 March 2013 and an update on its operations year-to-date 2013, in accordance with the reporting requirements of the EU Transparency Directive. Information contained within this release is un-audited and is subject to further review.

Three months ended 31 March 2013 results summary
Afren has made a strong start to the year driven by a year-on-year increase of 14% in net production principally from the Ebok and Okoro fields, offshore Nigeria. The Group remains on-track to deliver full year net working interest production of between 40,000 to 47,000 boepd. The Group's financial results reflect the increase in net production which has been partly offset by a lower oil price and the impact of the timing of liftings at Okoro. We continue to make good progress across our exploration and appraisal (E&A) work programme targeting high-impact opportunities across the portfolio.

Key Highlights
· Net working interest production in the period averaged 47,064 boepd; firmly on track for 2013 production guidance of between 40,000 to 47,000 boepd

· Multi-well E&A campaign underway

- Commencement of drilling on the Ogo prospect at OPL 310, offshore Nigeria, targeting 78 mmboe of gross prospective resources

- DST programme at Simrit-2 on the Ain Sifni PSC, Kurdistan region of Iraq complete, with aggregate flow rates of 19,641 bopd achieved. Well being prepared for Extended Well Test operations

- Completion of drilling at Simrit-3 on the Ain Sifni PSC, Kurdistan region of Iraq. Multi-zone testing programme underway to confirm the resource potential and the eastern extent of the Simrit anticline

· Active portfolio management

- Up to US$50 million carry received on OPL 310 for a 17.14% participating interest on OPL 310, offshore Nigeria announced on 14 May 2013

· Progressing Field Development Plans on recent discoveries (Okoro Field Extension, Ebok North Fault Block and Okwok, offshore Nigeria)

· Strong balance sheet

- Cash at bank US$563 million (31 December 2012: US$525 million); Net debt, excluding finance leases US$453 million (31 December 2012: US$488 million)

Commenting on today's IMS, Osman Shahenshah, Chief Executive of Afren plc, said:
"Afren continues to deliver strong production from our greenfield developments offshore Nigeria. Following the successful start to our 2013 E&A programme on Okwok, offshore Nigeria, and Simrit in the Kurdistan region of Iraq, we are currently drilling the West African Transform margin on OPL310 offshore Nigeria. The Group remains in a strong financial position supported by a growing production base, to optimally explore, appraise and develop our high quality portfolio and continue to create significant value for our shareholders."

Looking at TA, suggestion cup and handle formation.

With projected earnings would suggest price of 150 + with support at about 125 on long term (2year) support line.

SP now now at 140=

Worth a look long term, but DYOH.