< "> 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

mentor - Agreed, I haven't traded it for a couple of years. Plenty of scope to get back in if or when it recovers. Never easy trying to predict bottoms or tops.

If good news is in the pipeline.....all this tops, bottoms, bands or what...well...you can throw it out the window.....do you have faith is this company recovering ?...I do....so 2p out of pocket ?....it's a joke as it stands....patience,,,it willl rebound strongly.....I'm not glued to the markets so have to buy and wait which is more difficult but if the company is a good'un....no need to wait for the bottom 24/hrs a day.....XEL is another in silly price territory...COP is another....along with GKP, FPM and IAE....oil is not the flavour of the month but as economies recover,....demand will increase...if AFR has not reached the bottom : I'll stay put...but it might have and the bounce could be 10 or 20p up !....very quickly...

Or you could buy a few more and average down?

Sorry rf no offence intended, good luck with it.

Beaufort Securities 31st October 2014
Afren (LON:AFR) – Buy
Afren announced its unaudited interim management statement and financial results for the nine months ended 30th September 2014. The company also included a year-to-date operational update. Average net production for the nine months stood at 31,377 barrels of oil per day (bopd) with the full year guidance remaining between 32,000 to 36,000 bopd. Revenues for the period declined 34% to US$798.5m from US$1.2bn, in addition to the operating profit contraction of 57.3% to US$213.3m from US$500.6m. However, the post-tax profits improved to US$167.1m from US$128.6m, reflecting tax exemption at Ebok. Moreover, basic earnings per share from continuing operations climbed to 15.4c from 12.1c last year. On the operational front, final investment decision was taken for Aje and Okoro further field development, while a Wellhead jacket would be installed at Okwok in the fourth quarter. First oil is expected from all these facilities in 2015. At the Ebok Central Fault Block (ECFB) Extension, a platform is likely to be installed in Q4 2014. Drilling campaign started on OML 26 whereas OPL 310 is expected to be drilled for appraisal in 2015. Exploration drilling would soon begin with Ebok deep exploration well followed by Ameena East prospect on OML 115.
Our view: Afren reported a subdued top line growth owing to unfavourable weather conditions and installation delays at ECFB, and additional downtime at OML 26. The suspended operations at the Barda Rash facility also impacted the company’s production rates. Nevertheless, we expect the situation to improve in the next quarter following the resumption of field operations. Recently, an independent review absolved Afren of any further illegal payment charge after some of its senior officials were dismissed. We believe that the company’s present valuation makes it an attractive stock pick. We retain our Buy rating.

From Mr Poshman on another board

Agree they have lost some quality individuals but I'm sure they will search and find some more.

In fact in some ways it may suit the company to get some new leadership anyway, Osman has been in charge since 2005 and it would be good to get some new ideas and have a full review of the assets that we have.

The IMS wasn't that bad, was certainly a mixed bag. On the face of it, profit and cashflow look poor, but there would circumstances that impacted this. Profit was impacted by the Ghana writedown ($35.5m) and also seemed to have a large tax charge (all in the quarter), only added about $8m in the quarter but would be interested to see the normalised number. GM% was still strong, despite the drop away in the oil price in the last few months. They have hedged about a 3rd of production so still impacted by falling prices on the remainder.

Cashflow from ops was impacted by tax paid ($8m in H1 and $45m in Q3, I think probably deferred from first half of 2014). Underlying cash from ops was still quite strong, net debt was always likely to go up in this quarter due to ongoing development works expect the same in Q4. I'm expecting somewhere around $1bn net debt by the end of the year.

Some will worry about this, but the vast majority of the capex in the last 2 years has been spent on continued development of their assets which will result in increased production.

Ebok was obviously a poor component in the quarter and probably the reason for the fall in the SP since the IMS though I do think it has been overdone. Ebok had a poor quarter of production (down to around 23k) and also delays on the CFB extension installation. Good things are going on at Ebok are surrounding the Ebok North wells. I assume the production from the 1st well hasn't be running for long being as they are talking about testing of upto 5k bopd rather than average rates, so this will be upside as well as the 2nd well in the NFB. The others will only impact on 2015. Bit of a mixed bag from Ebok this quarter.

Okoro going well, 2 wells have been completed and will take Okoro back towards the production capacity for Okoro which is 22k bopd, should get somewhere between 20-21k bopd gross going forwards now from Okoro, even without the full field development of the extension planned for 2015.

I assume the rig from Okoro is either heading to OML115 and then Ebok to drill the 2 exploration wells and I assume the rig will then move onto development drilling at Okwok in early 2015.

OML26 also looking good, the flow rates from Ogini-22, with another due to come online shortly, and a 3rd in January then gross production from OML26 should be getting close to 10k bopd in January. Interesting to see that in the IMS they have stated 5 wells on OML26, when the interims stated 3. I wonder if they have been pleased with the flow rates and have decided to accelerate some of that drilling.

Barda Rash looks like it may be a bit more complicated than hoped looking at the problems seen with BR-4 and BR-5.

Overall its not a bad IMS but not filled with a load of fantastic news. Most of this news was already known though, and considering we have fallen close to 50% in the last 4 months, I think more than priced in.

Development s continuing and its feasible to be targeting 50k bopd by the end of 2015 net to Afren.

Ebok (current) - 30k
Okoro (current) - 10k
OML26 - 4.5k
Okoro extension - 10k
Okwok - 10k

I think they will be targeting higher production from Okoro and Okwok but I have only looked at net production here, if we pay for the vast majority of the development expenditure then we will have a higher working interest and therefore could even be higher.

Disappointed with where the shares are at but the company is continuing to move forward with their projects IMO.

http://www.thisismoney.co.uk/money/investing/article-2817711/SUNDAY-NEWSPAPER-SHARE-TIPS-Standard-Life-Energy-Assets-Afren.html
#
he investment case for Afren isn’t clear. Shares in the FTSE250 oil explorer have halved since an ‘unauthorised payments’ scandal erupted in July.
There was a big drop in production at its Ebok field, accounting for two-thirds of group sales. There have long been concerns that Afren was taking too much oil too quickly.
Afren blamed the slump on bad weather and pipeline problems. Watch this space.

Afren Potential Takeover Target For Nigerian General
South Atlantic Petroleum, or SAPetro, has built up a stake of nearly 7.1% in the company in the last few weeks following a plunge in the group’s share price in July after it revealed it had suspended its chief executive and chief operating officer.
Both were dismissed in the past week for “gross misconduct” following and investigation at the company into “unauthorised payments”.
SAPetro is controlled by General Theophilus Danjuma, the former Nigerian defence minister. The speed at which it has built up its stake has led to speculation in the market that his company could make a bid for Afren.

In another metric NAV = £1.21ps. So trading at a discount to NAV of 36%. Nett debt of c$850 is of no major concern when income, on present low output and low oil price, is significantly more than net debt.. With the drilling campaign soon to be in full swing, a few rns's confirming output restored to 40-45K boed will see sp at pre-payment scandal levels (£1,40). This may not happen before mid '15, but will be a 80% rise on present price. All in MHO of course. And, there may may well be a T/O offer at any time of at least £1.40ps.

The recent conclusion to the independent review has, in our view, removed much of the uncertainty surrounding asset ownership risk for Afren's key Ebok asset, but this has been replaced by concern around the breakdown of relations between Afren and Ebok partner Oriental. One factor in favour of an easing of tensions is that Afren was the main provider of funding and expertise for the Ebok development. In this respect Oriental needs Afren to continue the effective development of the area. Furthermore, the recent announcement from Oriental, while strongly critical of Afren, did conclude with the olive branch of a hope "the Partnership can return to its cordial relations".
The emergence of indigenous E&P Sapetro, which has built a 7% interest and is now Afren's largest shareholder, is encouraging for the shares from an M&A perspective. Whether Sapetro has the means to make a full approach is not clear to us but one possibility could be an increased board presence and a potential merger of the two companies.
We reduce our target price by 17p to 115p as a result of marking the model to our lowered Credit Suisse oil price deck. Overall, we expect pragmatism to improve Ebok partner relations and the continuing Sapetro presence to raise the possibility of M&A activity.

Not much direction yet on a down market.
Most of the trades are small order book "AT" with not many "O" so far

City view: Afren - light at the end of the tunnel
By Harriet Mann | Mon, 3rd November 2014 - 15:43
City view: Afren - light at the end of the tunnel
It has been a terrible few months for Afren (AFR). Three of its top executives have been sacked for receiving unauthorised payments and geopolitical tensions caused the oil and gas company to temporarily suspend its Barda Rash operations in the Kurdistan region of Iraq. Most were hoping that its interim management statement for the nine months to 30 September would help reverse the downward trend. It hasn't. In fact, things have just go worse. UBS, however, sees light at the end of the tunnel.

"Irrespective of the management uncertainty, Afren has had a difficult year from an operational perspective," say analysts from UBS. The company cut its production forecasts to the lower end of 32,000-36,000 barrels per day (bopd) from earlier predictions of 40,000bopd, after average net production for the nine months to 30 September came in at 31,377bopd. However, cash flow for the first nine months of the year and its earnings run rate was ahead of expectations.

After operations were reinstated at Barda Rash, the analysts point to the well cutting water earlier than expected as a "cause for concern", noting that the group's understanding of the asset is evolving, which puts its independent reserve estimate of around 1.4 billion barrels of oil under threat.

UBS has cut its target price from 130p to 115p, which still has a large upside risk given the current market price of 77p. But the broker also considers the advantages of a potential merger.

"The board now has two broad routes to pursue, not mutually exclusive," writes UBS. "One is to rebuild its management team and restore market confidence. The other is to assess whether its underlying assets might be worth more in the hands of other industry participants."

UBS also reckons the refinancing of its €210 million facility next year should not worry investors.

The covenant breach was operational, not financial; ii) Afren is not overly levered, with FY15E net debt/EBITDA (~1.4x @ $100/bbl; ~2.4x @ $80/bbl) within lenders limits; iii) Ebok is a low cost asset (opex: ~$15/bbl; pioneer tax holiday) and growth capex is largely sunk.

In a change to its numbers, UBS cites a core net asset value of 148p per share, down from 180p. It also sets a target of 0.53 times commercial NAV compared with 0.38 times currently.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Afternoon pullback on the OIL price was felt on AFR also falling to 75.15p close to intraday low of 74.50p last Friday
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U.S. Stocks Close Mostly Lower

Stocks finished mostly lower Monday, reversing earlier gains, after a slide in oil prices prompted heavy selling in energy stocks and spurred renewed fears over the health of the global economy.

The Dow Jones Industrial Average fell 24.28 points, or 0.1%, to 17366.24, wiping out modest gains that earlier pushed the index to a fresh intraday record of 17410.65. Energy stocks lost the most ground, with Dow components Chevron down 2.6% and Exxon Mobil shedding 1.5%.

The pullback followed an afternoon selloff in the oil market after Saudi Arabia announced it would cut the price of its crude to the U.S., suggesting the kingdom is aiming to undercut once-thriving U.S. producers. Crude-oil futures shed 2.2% to settle at $78.78 a barrel, their lowest finish since June 2012.
Prices have fallen 27% from recent highs in June.

down to 72.75p at one time though it was a spike, that was close to the 72p support

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Oil Slides on Speculation About Saudi's Pricing Strategy - 04 Nov 2014, 4:30am

Crude-oil prices extended losses in Asian trade Tuesday after falling sharply overnight, with the U.S. oil benchmark dropping to its lowest since June 2012.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $78.38 a barrel at 0402 GMT, down $0.40 in the Globex electronic session. December Brent crude on London's ICE Futures exchange fell $0.37 to $84.41 a barrel.

Oil plummeted after Saudi Arabia, the world's top crude exporter, adjusted prices for its December cargos. The oil producer lowered its price differentials for sales to the U.S. but raised the differentials for its Asian customers.

While the price adjustments were not as severe as the cuts for November, the lowering of prices for the U.S. market was interpreted by the market as stiffer competition against U.S. domestic crude production, traders said.

The pricing of Saudi Arabian and other Middle East oil producers for the U.S. market is based on the Argus Sour Crude Index, a basket of prices that's much lower than Asia, where oil fetches a better price. So it makes more sense for oil producers to corner the Asian market where premiums are higher, traders said.

OIL price falling to $76 down $2.80 at 10.30am

and AFR moving to just under 72p at one time ( 71.925p )

With OIL prices falling this way, there is not much point on buying the stock yet as the 72p support was broken too easilly

The stock is getting bludgeoned. Patience will pay for the ones already in, but I will wait further for another support point
Both oil prices and AFR are now falling Knives

« Catch A Falling Knife» ?

As per post #2551, if AFR have hedged their production above the $90 pb level, not sure why the sp is directly geared to the current price pb.

How long is it edged ?

See post 2551.

hedged 5.2m bbl at a floor of $90 to $95 thro to June 2015

Hedge is now 4.9m bbl at a floor of $90 to $95 - July 2014 to December 2015.
Afren hedge between 25% and 35% of production on an 18 month basis.