< "> 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

Well SKAGEN have reduced their holding but in the last few months South Atlantic Petroleum and Standard Life have both increased their holdings to 7%

Do you think SAP has bought the SKAGEN shares ?

I don't think so.

http://www.shareprophets.com/views/8943/afren-offers-great-value

The future for oil prices
By Harriet Mann | Fri, 14th November 2014 - 17:09

Oil prices have plunged recently to four-year lows. The repercussions have been felt throughout the exploration and production (E&P) sector. On Friday, the International Energy Association (IEA) said the market had entered a "new chapter," raising expectations that depressed prices are here to stay.
Brent Crude settled at sub-$77 a barrel on Thursday following weaker data out of China, and as a drawdown in US supply proved insufficient to ease the downward pressure. It's now quite possible that oil prices will suffer their longest run of weekly declines since 1986, warned Mike van Dulken, head of research at Accendo Markets.

"While oil continues to weigh on the energy sector and the economies of China and the eurozone move in fits and starts, there is little motivation for investors to continue their pursuit of Wall St and drive equities much higher for the time being," said head of derivatives at Interactive Investor, Mike McCudden.

Since the mid-way point of the year, oil prices have been faltering. But the IEA's reduced demand outlook last month really sped up the sell-off, says Eric Knutzen, chief investment officer at Neuberger Berman. He pins the fall on weakness in the eurozone, China and Japan, which has dragged down demand expectations from 1.3 million barrels a day in June to just 700,000. And geopolitical issues, which some thought would have driven up prices due to uncertain supply, have been offset by supply from North American shale fields.

But industry analyst Malcolm Graham-Wood puts more emphasis on rising oil supply. In the second half of June, concerned that the ISIS invasion in Iraq would hit the 2.5 million barrels of oil that is exported from the region every day, Saudi Arabia upped production to offset any potential losses. But Iraqi production hasn't changed and America has upped its game. Libya has, too.

It's little wonder that many point the finger at the US and Saudi for deliberately driving the price lower to hit Russia in the pocket. Moscow's involvement in both Ukraine and Syria hardly endears itself to either producer.

"So there is actually just too much of the stuff around, that's the real problem," he told Interactive Investor.

Other factors putting pressure on the price include the strong dollar and the upcoming Organisation of the Petroleum Exporting Countries (OPEC) meeting in a fortnight, which Goldman Sachs reckons will highlight the changing nature of its reaction function.

While some analysts expect OPEC will agree to cut production later this month, Graham-Wood, founding partner of HydroCarbon Capital, questions what incentive the group of the largest oil exporters would have to limit their supply.

"I'm not sure whether it really is in their best interests to cut production to get the price up. The difficulty is that around the OPEC table everyone has a different agenda, for example Venezuala needs about $160 per barrel to break-even, so wants it as high as possible. But none of them want to cut the production to get the price up enough. Why should OPEC feel the need to cut production because all they are going to do is feed market share to America in particular and other people who don't have a view on oil prices."

As a group, OPEC produces 31 million barrels per day, so production would need to cut by a long way to reduce supply and alleviate price pressure.

Graham-Wood reckons shrinking oil production by 1.5 million barrels per day and actually sticking to new production quotas would help increase oil prices back up to $100-$110. "It is in OPEC's gift, but I am not sure if they will do that. They want to show the rest of the world a bit of a bad time for a little while."

While he doesn't see prices rising in the short-term, he notes that there will be buyers soon as they are holding off to find as cheap a price as possible. Coupled with the improving American economy, Graham-Wood does not see slowing global growth, especially in China, as an issue, expecting demand to pick up in the second half of next year. He does, however, maintain his bear position.

"There is no reason why the oil price should pick up from here in the very short term unless there is decisive action from OPEC."



Such a bad thing?
But are lower oil prices a bad thing? For energy producers, yes, but not necessarily for global growth.

Lower fuel dampens inflation, argues Knutzen, which drives consumer confidence by increasing spending power. It also lowers the cost of manufacturing, boosting manufacturing-based economies like China. And GDP growth in the US could rise by 0.4% each year if oil prices are maintained at these lower levels, he adds.

Interactive Investor’s editor Lee Wild has highlighted some of the sectors and companies which should benefit from low oil prices. (LINK)

But weak prices throw up problems, too, due to their predictive function, Knutzen adds.

"In the current environment of extremely easy monetary, the fact the inflation remains relatively low and that commodity prices including oil have fallen so much is troubling from the standpoint of signalling the potential for deflation and/or recession. At a time when central banks have fewer tools at their disposal, it's unclear what they will do if economies do not turn the corner," he says.

And low oil prices clearly harm oil producers, from E&P companies to the regions that rely on the commodity for economic performance, like Russia, Venezuela and Ecuador, Nigeria and Angola. Knutzen reckons that if prices stay below $80, the economics of oil production will suffer, especially in the deep water sector where exploration costs are higher with greater risks.

"It highlights, however, a key insight for us: the importance of focusing on low-cost producers. We believe that many existing North American shale fields are profitable with oil below $80 or even $70 a barrel. And we continue to emphasise that there are 'haves' or 'have nots' in the space, making security selection key."

What should investors look out for?
Malcolm Graham-Wood says readers should look for three things when deciding whether to invest in the sector. Firstly, the cost of production per barrel should be low - an onshore company in a low tax region, for example Caza Oil and Gas (CAZA).

All companies should be fully-funded and not have to go to the market to raise extra cash. A 2015 drilling plan that would be economic at $70 per barrel would be helpful, too. That crosses off projects with high cost developments like offshore.

"Premier Oil (PMO) and Rockhopper (RKH) both come into the category of good developments that go at these prices. Companies like Faroe (FPM) with some exciting wells to drill next year raised money already this year, which is good," he said. "You need to be cashed up, in possession of decent oil, and an exciting exploration programme which works at $75 or less."

Large diversified companies with multiple revenue streams also lower the volatility of an investment. Knutzen points to strong balance sheets and high dividends.

"Among energy stocks, large integrated players are seen as less volatile given their multiple revenue streams, balance sheet strength and high dividends. Exploration and development companies may face more turbulence given their leverage to prices, although low-cost producers could be attractive. Natural gas producers could also become appealing, having sold off with oil stocks despite largely unchanged natural gas fundamentals. Finally, "mid-stream" players, which transport oil and gas, typically do not take commodity price risk and have long-term contracts for revenues, and may provide a happy medium for some investors.

"More broadly, we believe investment decisions should be made on an individual sector and security basis, taking into account exposure to energy prices from a cost perspective, counterbalanced by the potential for greater demand in some regions and countries. In essence, the particulars should continue to be based on individual research decisions," he adds.

Outlook
Knutzen reckons lower oil prices will be self-correcting, with Brent staying within the region of $80-$95 for the next year. Graham-Wood sees the low price environment continuing for the next six months, but points out that while there isn't a base price at the moment, a $50 barrel is unlikely.

"After that it depends very much on whether demand will pick up and how the supply goes. If it stays at the current price or goes lower for the next few months, investment will cut back. So you will see some of the American production coming off the market, which in itself will alleviate the supply problem for a bit. It's not the end of the world, but we have got a difficult time to come."

Goldman Sachs reckons oil prices will be weakest in the second quarter of 2015 at $80 a barrel, but pencils in $85 for the first quarter of 2015 and the second half, as a result of OPEC's loss of pricing power.

Further ahead, the expansion of shale will slow in 2016-2018, lifting some of the pressure on the price of oil, allowing it to rise, Knutzen says. "This easing growth, combined with additional delays in international development and potentially higher demand due to lower fuel prices, could help oil return to structurally higher prices in a year or two."

So, it appears we are in for a period of low oil prices. That's not what the majors want to hear, but they’ll pull through. In the meantime there are generous dividend yields to be had. And for those investors seeking an element of risk in an otherwise diversified portfolio, there are, as we have seen above, a number of small explorers which fit the bill.

Falling Oil Prices Test OPEC Unity

The Organization of the Petroleum Exporting Countries Knows It Must Cut Production to Lift Prices; Unclear is Whether Its Members Will Agree

Nov. 16, 2014 8:43 p.m. ET
As global crude prices plunged earlier this month, Venezuela’s foreign minister asked to see Saudi Arabia’s top oil official at a climate-change conference on Margarita Island, off the South American coast.

Ali al-Naimi, the Saudi oil minister, was expecting a plea to reduce oil output and bolster markets. In anticipation, according to people familiar with the matter, he brought a message to Venezuelan Foreign Minister Rafael Ramirez : Saudi Arabia won’t cut production on its own.

Mr. Naimi is expected to repeat the message to delegates at a meeting of the Organization of the Petroleum Exporting Countries in Vienna later this month, according to Saudi officials and fellow OPEC officials.

At stake is whether OPEC, a group of some of the world’s biggest oil producers, can still operate as a global cartel amid infighting and expanded global production, notably from the U.S. shale-oil boom. A failure to broker a deal for a collective cut would weaken the group’s already-sagging influence over global prices.

“The upcoming OPEC meeting is going to be the most difficult one during this century,” said Mohammad al-Sabban, a former senior adviser to Mr. Naimi. “It seems that OPEC has forgotten how to cooperate.”

Within the group, officials are increasingly worried its divisions contribute to weaker prices. “If OPEC fails to reach an agreement,” one OPEC official said, “oil prices will keep on falling.”

The group now pumps about half a million more barrels a day than its target of 30 million barrels a day, according to the International Energy Agency. Members are considering a commitment to rein in production to the group’s target level, OPEC delegates said, effectively cutting production sharply.

Together, OPEC member countries still produce more than one-third of the world’s oil supply. Since 1984, the cartel has reduced output 11 times to address oil price falls, according to Deutsche Bank, with cuts totaling 1.24 million barrels a day, on average.

Each time, Brent crude prices, the international benchmark, rose in the two to three months following OPEC action, Deutsche found.

A collective move to cut output could boost prices, but it would also rob OPEC members of revenue. It is unclear how long such vulnerable OPEC economies as Venezuela and Nigeria could afford to limit production without reopening the spigots.

Unlike past meetings, this month’s gathering poses an added dilemma. By keeping oil prices high, the group would encourage oil investments, including U.S. shale production. The U.S. has flooded markets with new crude, contributing to lower prices, but its shale production requires relatively high oil prices to make money.

That is an incentive for OPEC to do nothing for nowif members can survive the pain of lower prices in the short term.

Privately, Saudi Arabia doubts the 11 other OPEC members would live up to a collective commitment to cut output, according to Saudi officials and Saudi oil-industry executives. And Riyadh isn’t willing to bear the pain of a unilateral cut, these officials and executives said, fearful of losing customers amid the current squabbling.

The uncompromising Saudi stance stems from the 1980s, when Saudi Arabia cut production sharply to bolster oil prices as substantial new oil supply emerged from the North Sea and the U.K.

Instead of standing by Riyadh, other OPEC producers kept pumping and tried to wrest away market share.

“Saudi Arabia has definitely made it clear that defending the oil market is a collective responsibility, and no member country should expect Saudi Arabia to swing alone,” said Mr. Sabban, the former aide to Mr. Naimi. “If there is no agreement on this very basic principle, then Saudi Arabia will continue defending its market share.”

Saudi Arabia, with its large cash reserves, is cushioned from short-term price weakness. Still, the kingdom needs Brent to average $99 a barrel to balance its budget this fiscal year, Deutsche Bank estimates. It is currently trading just under $80 a barrel, a four-year low.

While oil-market dynamics are complex, two broad issues underlie the commodity’s recent fall. The IEA estimates the U.S. is adding roughly one million barrels of oil a day each year to global supply, thanks to shale oil. The return of an unexpectedly large amount of supply from such strife-ridden countries as Libya and Iraq has added to the glut.

Meanwhile, growth in global oil demand has slowed, particularly in Asia. In March, the IEA expected annual oil consumption to grow by 1.35 million barrels of oil a day in 2014. Its estimate has since nearly halved, with the paring of forecasts for global growth.

Repercussions of the OPEC debate go well beyond the borders of its members. Lower oil prices are slamming Russia, for example, which is already squeezed by Western sanctions and a tumbling currency.

U.S. consumers are benefiting from lower prices at the pump. But lower prices also shrink cash flow at many U.S. oil companies, particularly those engaged in relatively expensive shale-oil production.

If weaker prices force some producers—particularly U.S. shale producers—to abandon their most expensive wells, then the market could eventually work in OPEC’s favor.

In early October, Saudi officials led by Nasser al-Dossary, Saudi Arabia’s national representative to OPEC, attended a seminar in New York organized by an energy consultancy. Mr. Dossary privately communicated to attendees that Riyadh wasn’t alarmed by the price slide and wouldn’t unilaterally cut its output, according to people familiar with the matter.

Attendees interpreted the remarks as a signal Saudi Arabia would try to undermine North American shale-oil production by allowing prices to slip to a point where some shale projects would be uneconomic.

And some analysts took a move earlier this month by Saudi Arabia to drop its crude prices in U.S. markets as a sign it was trying to undercut shale producers.

A person familiar with the Saudi visit to New York said analysts misinterpreted Mr. Dossary’s message and that Riyadh wasn’t targeting shale producers. Attempts to reach Mr. Dossary or the Saudi oil ministry media office were unsuccessful.

Industry officials familiar with the Saudi price cut said it was aimed only at protecting market share among U.S. refiners.
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earlier post 14 July 2014

OPEC dilemma ..... http://graphics.wsj.com/opec-dilemma/

Next news from Afren may be that a new CEO, and COO have been appointed.

Then an update on current drilling may be expected in December, which I guess
could be good news.

Crude oil price seems to have stabilized, and I think may tick up from current levels, after OPEC meeting.

Iraq situation / payments etc seem to be improved

£45 million thought to be misappropriated by ex directors could be substantially recovered.

I see Afren as a buy at the present price of 72.10.
Especially in the run to the new year, and with a PE ratio of about 2 ?

Consolidation will cut the number of oil producers in Kurdistan by three-quarters within five years, Genel Energy Plc (GENL) Chief Executive Officer Tony Hayward said.

“It’s likely that we’ll end up with, perhaps, five or six of the largest companies operating with Genel, Exxon, Chevron ending up as major operators,” Hayward said in a Nov. 21 interview during the Atlantic Council conference in Istanbul. “It’s what happens in most hydrocarbon provinces.”

If this happens what value would be placed on Afren's two large interests in Kurdistan ?
- maybe Afren would sell Kurdistan interests to a major player ?
What value is presently placed on Afren, Kurdistan ? I think about nil value.

">----------------------------------------------------------------------------------------------------------http://www.cnbc.com/id/102222286

El Strudza Investments? were on CNBC this morning singing AFR's praise and the fact that they held shares in AFR.
2517

Worth buying both AFR & GENL when crude bottoms out. Heard a speculative opinion this morning on IG that $65 pb is a definite possibility.

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10 year chart above.
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C&Ped
From a respected accountent.

take current yr daily avg production on 32k bopd, thats 11.7m barrels.

if 4.8m barrels are hedged between 90to95 $/b, then thats ~41pc of total production hedges nicely.

so you could argue the SP is reflecting a massive drop on 59pc of its production, which is a massive disconnect, and imo presents a great value opportunity...

fear is afoot, but as we all know, its a fickle thing; turns on a dime. :-) all you can do is take your positions, and wait..

I did on Wed !!

As jimmy found out ...... where's the bottom???

Got my timing wrong here , i shall stay put though ,it's oil ,not as though it's going out of fashion .

bit the bullet and topped up at 52.14p ave 65p now. :(

HTTP://www.telegraph.co.uk/finance/oilprices/11260918/Oil-drop-is-big-boon-for-global-stock-markets-if-it-lasts.html

Seems the obvious reason.

Http://www.ft.com/cms/s/0/8b33af5c-76d8-11e4-8273-00144feabdc0.html?siteedition=uk#axzz3KRqGlJkF

http://www.telegraph.co.uk/finance/oilprices/11262690/Why-black-golds-low-prices-wont-last-long.html#disqus_thread

Crude Oil and Commodity Prices
December, Monday 1 2014 - 03:14:08
WTI Crude Oil
$66.15 ▼-7.54 -11.40%
2014.11.30 end-of-day


Brent Crude Oil
$70.15 ▼-7.60 -10.83%
2014.11.30 end-of-day