< "> 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

http://www.bloomberg.com/news/2014-12-08/hedge-funds-betting-that-opec-led-oil-rout-is-near-end.html

Nasty looking chart.

My recent purchase will be staying firmly where the sun don't shine for the foreseeable future !!

Join the club jimmy, my 52p is off the scale now. :((

Http://money.cnn.com/2014/12/08/investing/shale-oil-spending-america-opec/index.html?iid=Lead

This bit is interesting for Afren holders.

Fire sales ahead? The defiant statements show how the American energy industry is not backing down against OPEC, which appears to be attempting to choke off the U.S. shale boom with painfully low prices.

If oil prices remain low -- or even tumble further -- some smaller energy companies and high-cost producers are likely to find themselves in serious financial trouble.

That could present a buying opportunity for Big Oil companies that have the financial flexibility to take advantage of a fire sale.

"The best thing for Chevron and Exxon...is to see oil prices crashing and scare the hell out of everybody else. It becomes a window of opportunity" for acquisitions, said Gheit. He predicted a wave of mergers and acquisitions if oil prices don't recover by next summer.

Oil still in free fall,making one wonder just how low will it go? Thought i'd wait for sub 40p,but it feels like trying to catch a falling knife at present,Afr's will imo weatherthis storm as it's hedged oil(90p+)along with expected improvement in reserves.
Take over is the best reason for investing at present imo,but only time will tell,so good luck to all holding.
Me i'll wait for the xmas period and see?

My lost on these is now 66% , sold a few more @ 40.25

Done the right thing this will only get worse in 2015.

I don't think so ,i have a buy a third higher than here but am going to ride it out ,i usually use a fairly strict stop .Going against the grain here for now.

I can't see any problem with investing in either AFR or GENL for the medium term. When the price of crude starts to rise again, which it inevitably will, then the sp of both of these, plus many other oil producers, will rise accordingly. It's almost impossible to pick the very bottom or the very top of a chart, so for holders (investors) at whatever price, surely it's just a case of either sitting tight or averaging down?

Big oil will wait until oil hit's rock bottom or near, before bidding for other company's. $40 to $55 i think would be near to bottom.

Run for the hills..!

some comfort with a touch of realty.
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A quick look at some figures.

We know that Afren has production costs somewhere around $40pb area.

Assuming 30% hedged at $90 on 32k bopd is 9900 barrels

Thus 9900 bopd at $90 = $891000 per day or

at $50 profit per barrel = $495000 per day.

The remaining say average $60 per barrel over one year = 22.1k bopd * $60 = $1326000 per day

or at $20 profit per barrel = $442000 per day.

So profit of $937000 or £597825 per day.

Allow 330 days per year for a bit of downtime = $309.2m or £197.3m profit for the year or approx 18p profit per share.
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Just one point: Everyone is assuming that we can actually sell or have contracts for all the oil we are producing at the moment. If there is a glut, then either it is not sold or it keeps getting cheaper. The latter is not a problem for Afren at current prices.

Admittedly it was due to the financial crisis in 2008/9, but 14p seems to be the bottom!!!

Stocks yet much cheaper today

Best time to buy oil stocks since 2009" - Fri, 5th December 2014 -

Since the middle of the year oil prices have lost over $40 a barrel (bbl), and as sentiment turned ugly the last of the downgrades followed suit. But for long-term investors with a horizon of over 12 months, this could provide a perfect entry point to "sensible" oil plays, says Numis.

Brent fell to $69/bbl on Friday afternoon, down from $110/bbl less than six months ago. Mirroring this trend, the Numis analysts reduced their price guidance from $100/bbl to $80/bbl. So why are they advising investors open their portfolios to oil?

E&P companies are known for outperforming the market as oil prices rise but underperforming at stable levels, says Numis, arguing that now is the perfect time to lock in. In fact, they reckon there hasn't been an investment opportunity like this since 2009, which was followed by two years of outperformance with returns from E&P mid-caps averaging 150%.

"We believe we are close to the bottom of the current cycle and that generalist fund managers will look to close their underweight stance and move towards a consensus 'neutral/overweight' in the coming months," explains Numis. "We believe investors should be looking to buy E&Ps when the oil price is well within the cost curve and the commodity market is pricing in minimal scarcity or supply risk premium."

The recommendation changes, see table below, include Tullow Oil (TLW) from 'hold' to 'add', Genel Energy (GENL) from 'add' to 'buy', Premier Oil (PMO) from 'hold' to 'buy' and Salamander Energy (SMDR) from 'hold' to 'buy'.

As we reported last week, Panmure Gordon still reckons OPEC will decide to cut its production to increase prices, but at a larger rate than if it had already done so to compensate for the delay. However, Numis also sees the tightening of supply being driven by US shale in the short term - as it will be uneconomic for US shale companies to maintain the number of rigs that are in production - and the abandonment of non-OPEC projects - like ultra-deep water, oil sand, Arctic and small-field developments.

"This will inevitably have a negative impact on non-OPEC supply growth expectations two-five years out and drive the next oil price cycle," said the analysts. "With oil price well within the top-end of the crude oil cost curve and with minimal scarcity or risk premium in the price we see this as an opportunity to add to E&P exposure."

However they do not rule out a change to OPEC production targets, warning that a ramp-up in Libyan production, Iranian sanctions and lower fourth-quarter output from China could impact short-term oil prices.

"Taking a longer-term view, we believe investors should be looking to buy sensibly-managed, resource rich E&Ps when the commodity price is well within the cost curve. We believe that investors need to be selective and gain exposure to high quality resource portfolios that would appeal to strategic buyers even if the current oil price was to prevail. Genel is one of our top picks given this investment filter."

From Mr Poshman on another board

Forecasts of $10-20 is ridiculous. The only fields in the world that would be cashflow positive would be in Saudi Arabia!!

There has been a lot of talk regarding shale vs onshore vs offshore breakeven points, but this is where people are looking at this all wrong and just looking on a profit basis. In order to ride it out, most companies will be looking at their cashflow production from ops to determine where they go.

There is a significant difference between offshore and the other 2 (shale and onshore). 1 is highly capital intensive (offshore) the others are opex intensive. Generally due to shale and quite a lot of onshore wells being shallow (I know not all are) the capital costs are relatively light, I think you can drill some shallow onshore for less than $5m, you wouldn;t get anywhere spending $5m offshore, generally even shallow offshore wells will cost north of $30m with the deeper wells costing anywhere upto $100m.

Where people are getting it wrong is purely looking at profit breakevens and not cash breakevens. Profit breakevens on onshore and shale are known to be higher than offshore wells, but the difference between the 2 in terms of cash breakevens further diverges.

I believe Afrens cash operating costs to be somewhere in the region of $30 (operating costs were $14 in 2013, add on royalties etc and you get somewhere around the $30 region). I doubt there is 1 shale field in the world that can compete on a cash basis with that.

The big difference comes from the effiiciencies in flow rates from offshore fields compared to those onshore.

Offshore oilees can absorb lower oil prices through their cashflow (doesn't look great reading for profit, but at least they have that cashflow protection) and why Exxon recently said they can absorb prices down to $40 for a period.

I don't think these prices are going to be around for long (oil prices that is) as onshore producers / shale producers are going to be coming under some intense cashflow pressures in the short term and due to the nature of having to spend more and more capital to maintain their flow rates, production is likely to drop baring any outside influence from their governments.

Likewise if oil prices continue to drop, expect some of the majors to start putting some of their fields on C&M, which in turn will again reduce supply. This is a game of cat and mouse for whatever reason (starving the shale producers, reducing IS income, putting pressure on the Russians, take your pick) but at some point the balance will be tipped and production will be cut. Remember this isn't just about Opec, the majors produce a significant amount of worldwide supply and unlike the governments that can quell public unrest, the large oil companies have shareholders interests to protects (and likewise their own jobs) so will have no issues with cutting production.

I'll be emailing Afren about their relentless silence (hardly helping) and asking what their capex plans are now for 2015. They can still makes 100's of $m in cashflow next year baring a complete collapse in the price (which will then be pushed up with fields going into C&M or companies becoming insolvent) its whether they spend this next year I'm not sure about, what buffers do they build in? I assume they will continue to develop Ebok, it makes sense with the tax exemption, but I suspect development of Okwok will be cut, and most of the exploration will be cut, and if any breaches licence conditions I would think they will gain extensions from the countries in question bearing in mind the current volatile oil price and the need to conserve capital.

Does anyone have any information on the covenants relating to Afren's debt, primarily the senior secured notes?

Off 5% this morning.

NAV of £1.20.
4.8mboe hedged between $90 and $95.
$266m in cash.
Production increasing towards 40000boe/day(cash generating).
SAP have 7% ( possible bid).
P2s due to increase.
Kurdistan conditions improving.

http://www.bloomberg.com/news/2014-12-12/record-oil-tankers-seen-sailing-to-china-amid-stockpiling-signs.html?hootPostID=704aec2b8d7163ae8d2ad7167103a4e6

The International Energy Agency, a Paris-based adviser to 29 nations, said in a report today that China may have added to strategic crude stockpiles last month, after pausing the activity in October. Oil plunged into a bear market this year, with Saudi Arabia and other nations in the Organization of Petroleum Exporting Countries offering few signs they will tackle a global glut