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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

Post by MRposhman on iii

Combination is just a fancy word for saying that they are looking at a merger. As Afren are bigger than Seplat they cannot "takeover" Afren in the usual sense, but can instigate a reverse takeover, but I think if they wanted to "combine" then they will do it in the least aggressive manner initially and that's through a merger. Whether they will need to get more aggressive I have no idea.

The fact that Afren are now under the takeover code rules shows that this is not just a farmout and any offer will be for either all of none of Afren.

I've re-looked at my figures and production levels for 2015 and I have used various oil scenarios but will provide the $65 oil scenario. I've valued the business on an EBITDA basis and have the below figures (I won't go into all the details).

Core valuation based on EBITDA = 94p
Less gain on hedging = (5p) - removed in case of long term lower oil prices
Value of Kurdistan upside = 29p (Valued at $0.5bn less than we paid for it)
Okwok / Aje full year impact = 10p
Net debt = (52p)
Value at $65 oil = 76p

The same basis at $80 oil is 114p and $100 oil is 163p.

I think its relatively conservative as it values all exploration acreage at nothing and does not show anything for additional upside at Ebok (as this is valued purely on production).

I would say then that the 75-76p region would be purely the starting point for any valuation (whether takeover or merger). I would expect them to be looking at far higher 100p plus due to the size of the exploration acreage. Bear in mind that the above figures including absolutely NOTHING for Ogo which was one of the largest oil discoveries in 2013 and clearly has value.

There is no real requirement for the Afren BOD's to recommend a takeover / merger unless it represents value to current holders and therefore IMO any price would need to be north of 100p. Sure the premium looks high based upon current SP, but you need to look at valuation of the assets, there is no need for any fire sale, make no mistake Afren are highly cash generative even at $60-65 oil and therefore any board decision must be compelling for current holders.

I'm sure we will find out more over the coming weeks, as we run up to the Seplat offer deadline as per the takeover code.

Hope everyone has a happy Christmas (even hel x!!), its nearly Christmas already down here in Melbourne so have a happy and Christmas and heres to a MUCH better 2015 for Afren holders.

IMO..... shorters will continue to 'graze' away at AFR until the company puts out a supporting RNS wrt management issues fix / end and expectations for any potential takeover offers.

Expecting more than one stalker in Q1 2015 for AFR, which will cause Investment Brokers to undertake accurate evaluation of situation and reaffirm mark to market £SP. Weak $Oil main key driver to encourage stalker bids.

DYOR

HAb

Brent still regularly nudging sub $60 pb and presumably all of the oilies' next set of results are going to be below expectations, so more downside to come, imo.

I know this is the result of USA shale....but are their exports (I think that they are exporting a little now) going to continue ? or is this just for a year or so and then massive crude imports again ?

A lot of US shale co's will be struggling with oil at the current level.
2517

which has been one of saudi's targets

Harry you could be right about the poo,which will effect values of the oilers.But as far as AFR is concerned, it should be remembered that they have a large hedge on their oil sales so some protection there.
Now the recent approach from slpat was for 51p and my understanding is that they have until the 19th january to meet the offer rules? So trading some 10% below the offer mentioned,whether they confirm or come up with some merger proposals only time will tell?
In the meantime whether to take a punt or not,it's worth remembering in the xmas/new year period shares tend to be weak. Interesting couple of weeks ahead for sure.

Unless SEPLAT come up with a mind boggling offer, which I think is unlikely, how can AFR board recommend any kind of t/o? My opinion is that this is just an exploratory approach which means that SEPLAT have to do a certain amount of DD by looking at the AFR books. The trouble is that if and when SEPLAT walk away, the AFR sp will take another hit, albeit very temporary.

Every time i buy these shares it goes down when i sell it goes up, thats 3 times in a row now, so its due for a raise now to 60p

my guess is that seplat just wants to have a good dig around in the books, and then put the screws on shahenshah to sell his shares cheaply ... in exchange for which, he'll be allowed to escape many years in a salubrious lagos jail

We may have an update on Ameena drilling soon.
.. and perhaps an update on ex directors activities, as this has been a few months now.

I lived in Nigeria, near Port Harcourt for a few years .. a very unpredictable place.
I can not guess yet what Seplat and South Atlantic and Shahenshah are up to ???

Hold tight for some excitement !!!

Drilling commences on the Ameena East Prospect

Afren and its Partner Oriental have spudded the Ameena East well located on OML 115, offshore Nigeria. The well is being drilled with the Shelf Adriatic I drilling rig. The Ameena East prospect will be targeting 65 mmbbls of gross unrisked resources in zones of prospectivity in the Biafra intervals that are productive north of the acreage, with secondary objectives in the Qua Iboe reservoirs equivalent to those at the Ebok and Okwok fields. The drilling campaign at Ameena East is expected to be completed in December, 2014.

http://www.moneyam.com/action/news/showArticle?id=4950323

http://www.moneyam.com/action/news/showArticle?id=4950849

After an annus horribilis for us long term holders, lets hope 2015 becomes an annus mirabilis(wonderful year}.
We seem to have had a bum deal.
Wishing you all a prosperous 2015.

From Oilbarrel.

By Amy McLellan

It will come as little surprise to company watchers to learn that London-listed Afren, which has had a torrid six months after its CEO, COO and other directors were found to have been in receipt of secret payments, is vulnerable to takeover.

Shares in the company have lost two-thirds of their value over the past six months as investors ditched stock in a company with such glaring governance issues.

Now the company, which has seen its shares rally over the past week, has confirmed it has received what it calls “a highly preliminary approach” from Seplat Petroleum Development Co, the Lagos-based oil company that raised £300 million in its April IPO, becoming the first Nigerian company to have its ordinary shares listed on both the London Stock Exchange and the Nigerian Stock Exchange.

Shares in Afren jumped 10.5 per cent to 50.82 pence in morning trading on the news before settling to close almost four per cent higher at 49.39 pence, while SEPLAT surged 23 per cent to close at 126.25 pence per share. On Christmas Eve

Certainly there would seem to be some sense in a tie-up: both companies are focused on Nigeria, where Afren has built a production base of 31,000 bpd and has further development work underway while Seplat has averaged 29,014 boepd over the first nine months of 2014. The Nigerian company is sitting on a pile of cash after its IPO and has made clear that it is on the look- out for new business opportunities.

Afren would add a material slug of production and reserves as well as adding geographic diversity, with projects elsewhere in Africa and the Middle East. A combination of the two companies would create a production powerhouse in Nigeria, with the scale to tackle bigger projects as Big Oil continues its retreat from the onshore and shallow waters.

The rout in the oil price – down 40 per cent since June – means share prices are feeling the pressure and momentum is building for a new wave of M&A activity in a hard pressed sector ripe for consolidation. Given the weakness in its share price after CEO Osman Shahenshah and COO Shahid Ullah were suspended in July and then sacked for gross misconduct in October, Afren was always going to be vulnerable to opportunistic bids.

And despite the aftershocks of the sackings, Afren’s portfolio includes quality assets, with a strong production base, a slate of developments, with the Okoro expansion project and the Aje and Okwok fields due onstream next year, as well as high impact exploration projects, such as the Ebok Deep prospect and the play-opening Ogo discovery. And that’s just in Nigeria.

Further afield, the FTSE 250 company recently announced an oil discovery on Block 1101 onshore Madagascar, has production and development projects in the Kurdistan Region of Iraq and is tee-ing up some exciting exploration wells in Cote d’Ivoire and Kenya next year.

Afren said that Seplat has until 19 January to make a firm offer under UK takeover rules. It may well be that Seplat finds it is not the only one to see the potential of a low ball bid for Afren.

TWITTER

http://www.cnbc.com/id/102302392

http://www.afren.com/investor_relations/


31.12.2014
Settlement of claims against former CEO and COO
Afren plc (“Afren” or the “Company”) announces that it has successfully secured, from its former CEO, Osman Shahenshah, and former COO, Shahid Ullah, a cash payment of US$17.1mn in relation to payments made to them that were not authorised by the Board, and as first announced by the Company on 31 July 2014.

interesting .... so have the cases etc against the other non-main-board directors now been dropped? .... if so, is that a case of no case to answer or one of "insufficient evidence" or similar?

More to the point, imo, this means that there is nothing to deter possible moves for a t/o merger with other companies which might have baulked if there was possible litigation in the system. One less stumbling block.