< "> 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

They need cash urgently.

Afren plc ("Afren" or the "Company") provides an update regarding the review of its capital structure, liquidity and funding requirements announced on 20 January 2015.

In light of the significant dislocation in the industry and related financing markets resulting from the rapid decline in oil prices, the Board has been reviewing the funding and liquidity requirements of the business and seeking to address how it manages the overall leverage position of the Company.

The Company had a cash balance of approximately US$235 million at 31 December 2014. Liquidity available to the Company is significantly lower as a result of restricted and segregated cash balances in place to address operational requirements. The Company's near term cash flow is also impacted by capital expenditure incurred in late 2014 before operational changes had been implemented to adapt to the current lower oil price environment.

As previously announced, Afren has initiated negotiations with the lenders of the US$300m Ebok debt facility with a view to obtaining a deferral of the US$50m amortisation payment due on 31 January 2015.

In addition, the Board is considering whether to utilise a 30 day grace period under its 2016 bonds with respect to US$15m of interest due on 1 February 2015 while the review of the capital structure and funding alternatives is completed.

These actions are being taken to protect the immediate liquidity position of the Company while it seeks funding to address its additional requirements.

The Company has been advised that an ad hoc committee of its largest bond holders has been formed. The Company has initiated discussions with the advisers to the committee regarding the immediate liquidity and funding needs of the business.

The Board has reviewed its business plan with the aim of minimising its funding requirements in the current oil price environment to focus on the development of the Company's core assets in Nigeria. Assuming the Company's current debt structure remains unchanged, there is an equity funding requirement which is likely to be significant and in excess of the Company's current market capitalisation. New funds will be required to meet interest and principal repayments, working capital and a reduced capital expenditure programme. The Company will be having discussions with its existing stakeholders and new third party investors regarding recapitalising the Company.

The Board is implementing efficiency and cost optimisation measures to improve its liquidity position. Alvarez & Marsal has been engaged to provide services as Chief Restructuring Officer.

Afren continues to be in discussions with SEPLAT Petroleum Development Company plc ("Seplat") regarding a possible combination with Afren.

There can be no certainty that an offer will be made or as to the terms of any offer.

Afren notes that in accordance with Rule 2.6(a) of the Code, by no later than 5.00 p.m. on 30 January 2015, Seplat must either announce a firm intention to make an offer for Afren under Rule 2.7 of the Code or announce that it does not intend to make an offer for Afren, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

Further announcements will be made in due course.

Its all over now.

What is?

sure glad i'm on the right side of this one, even if only with a fairly modest position

phewwwwwwwwwwwww!!!
more debt than cash - oil cost more to produce than sell.........................................
kaput
gla

In freefall..3p anyone..?

5.5p and still tumbling

bouncing around all ofver the bplace as shorts buying back before there's total collapse
took my profit at 8.30p as risk/reward didn't warrant staying put

yep traders trying to make a few bob on a dead cat - boing then SPLAT
gl

Glad i wasn't tempted to buy

27 Jan Westhouse... 90.00 Neutral

You have to love these brokers !!

I hope R F didn't fill his boots again

Count myself fortunate not ever being in AFR.
2517

Iv'e done very well out of AFR over the years ,in and out a few times ,unfortunately i just gave most of it back !!

Canaccord summary today:
"Assuming the current debt structure remains unchanged, Afren confirms it has an equity funding requirement in excess of its current market cap, which stands at ~US$300m. This is in-line with our previously published estimates - at US$60/b we forecast Afren's net debt will rise to US$500m above the current debt ceiling assuming a Net Profits Interest payment (NPI) to a field partner is made, or US$260m without the NPI payment; Afren will of course require additional liquidity above this level to sustain day to day operations.

Afren had US$235m of gross cash as of YE '14, however, available liquidity is significantly lower as a result of restricted and segregated cash balances in place to meet operational requirements. Discussions remain ongoing with existing lenders to defer a US$50m amortisation payment due on the Ebok facility on 31 Jan 15 and the board is considering whether to utilise a 30-day grace period under its 2016 bonds with respect to a US$15m interest payment due 1st Feb, whilst the review of the capital structure remains ongoing. Afren is also in discussions with existing stakeholders and new 3rd party investors regarding a recapitalisation.

Discussions with Seplat over a potential combination with Afren remain ongoing and the previously disclosed deadline of 30th Jan remains.

Following the write-off of Kurdistan the equity value is marginal dependent upon future oil price assumptions, at our base case oil price (futures strip and US$80/b from '18) we calculated a Central NAV at a 10% discount rate (i.e. if Afren were fully funded) of 25p/sh, however, this equity value falls to zero at a flat oil price of around US$63/b or on our base case oil price assumptions and a 15% discount rate. Afren remains an extremely high risk investment."

sorry for all holders who are sitting on big losses

Cazenove's take on things:
" Liquidity shortfall. The coincidence of heavy investment and reduced cash flow has caused a dramatic contraction in Afren’s funding position. We forecast net debt at YE 2014 of $1,153m including $100m of cash (Afren today cites YE 2014 cash of $235m, but cautions that much of this is restricted). This leaves approximately $120m headroom in Afren’s facilities. Given the capital requirements of the operations, the interest and amortization payments due shortly and continued lower cash generation in the low oil price environment, this level of liquidity is clearly insufficient.
Near term risk of major equity dilution. At this point there is the risk of significant equity dilution, which may be one of the only routes for Afren to secure the additional capital it needs to fund near term commitments and give it time to renegotiate a more appropriate debt capital structure. If Afren were to raise $300m gross at a share price of 5p [10p] (anticipating a share price fall today and allowing for a sizeable discount thereto), it must issue 3.94bn shares [1.97bn shares] vs. 1.1bn currently in issue. This would reduce our core NAV from 54p to 16p [26p], NAV dilution of 70% [52%]. Afren states that it is in discussions with existing stakeholders and new third party investors regarding recapitalizing the company. It is conceivable that an equity placing could occur at a higher price than either 5p or 10p. Equally, it is possible that a well capitalized suitor could intervene if it prefers to preserve the going concern – this could reduce if not bypass Afren's equity funding need.
Where now for Seplat? Since disclosing its original highly preliminary approach (22 December), Seplat has seen Afren completely write off its 2P reserves in Kurdistan and descend into its current liquidity crisis. Afren’s share price was 49p at close of 22 December. While Seplat has seen Afren’s equity decline, making any acquisition or combination cheaper, it may be put off making a formal offer if the capital requirements to keep Afren running could threaten Seplat capital well being. Seplat has until 17:00 on 30 January to make a formal approach although this deadline can be rolled once again. Seplat has net debt of $48m (2014 interim results) and borrowing facilities of up to $1.7bn, including the $700m acquisition facility (disclosed on 15 January 2015).
 Lack of trading update. We were expecting a trading and operations update today. We still expect a trading statement although understand this will likely be after Seplat clarifies its position. YE 2014 actual net debt, along with 2015 capex and production forecasts are key disclosures.

Maybe worth a punt at 3p otherwise don't even bother.
Westhouse 90p target lol.