< "> 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

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.

IMO...surprised AFR has not asked to have its shares suspended, given the tanking of the SP.

A sad day for what was a 'star' company, with great potential.

Whoever buys AFR will still have to dig the oil out of the ground at a cost effective price per barrel, which looks to be above $55. However Oil$ continues to fall below $45; wells to be shut in and future exploration cancelled.

However expecting other OPEC / non-OPEC countries to start cutting back production to raise $Oil price - Russia / Iran / Nigeria / Venezuela. The $Oil price can only drop so far for these countries whose GDP is highly linked to $oil p/brl. Some retaliation is inevitable, IMO Global tension of oil production / supply routes will come into focus in some way, shape or form.

Obama during his Saudi Arabia visit has already emphasized the requirement to develop 'stronger relations' with Saudi Government to maintain greater security in the region.

DYOR

HAb

Not good I have to say....what else.....

HAb

Obama during his Saudi Arabia visit has already emphasized the requirement to develop 'stronger relations' with Saudi Government to maintain greater security in the region.

That's funny if it wasn't so tragic , America and Saudi are two of the main country's who
have helped to inflame the madness that is the Middle East

Not nearly as funny as Tony Blair being Peace Envoy to the middle east ,now that really was a smack in the mouth for the region .

Incredible down 72% on the day.

From Prmoldoaks on another board regards Afren

I have to admit this company and its management has been incredibly complacent, and its reporting and management is unbelievable.

I am fairly well connected generally and do have some contacts on the ground and within the industry, including some of the financial institutions.

Afren's statements recently have been poorly drafted and issued without due regard to damage limitation, some would suspect a deliberate attempt to devalue the SP.

Working with the numbers on the balance sheet, the debt and forward projections we can work our own conclusions which are simply mathematical.

My synopsis yesterday is still VERY ACCURATE and the numbers into days RNS reinforces that, including $230m in cash.

Afren is like most people, they have a certain amount of cash but getting their hands on it is sometimes difficult, and takes time to extract from various sources, its easy to write it down on the balance sheet.

Afren has a large proportion of that cash in the Afren/Oriental account for the Ebok development, you may like to call this a float, each partner pays out a share at given times but always keep a float.

It has the Cash to easily pay $50m & $12m but that takes it out of its normal operating zones, could be done, but takes time and they would not really want to leave the Ebok float low.

So alternatives are to delay payments and restructure if possible.

The cash flow required now is due to the increase in capex to bring more wells on line and that in tern will increase cashflow and ramp up production.

Afren are now cutting discretionary capex and will delay non producing asset expenditure, Barda Rash is an example of this.

(However Barder Rush have now completed the BR5 well and is testing so I believe and my contacts suggest the results here are better than thought so maybe some positive news flow from that afterall, remember Afren still has a 20% share of Hunt oils Kurdistan Asset that have recently committed to more production wells so I'm told)

I think the key here now is the restructure of debt, if this can be done, and probably through the addition of an increased loan facility or 3rd party farm in, Afren could ramp up production to pay back this facility fairly quickly given the major Tax breaks Afren currently receives.

Remember this effects Oriental Energy big time so its not just Afren piling on the pressure to bond holders, bankers etc.

The sp is ridiculous and if a refinancing deal can be struck (just the same as Enquest) things could turn very quickly.

Our saviour will be either a decent bid from Seplat or a supportive restructure short term, remember other debt is serviceable by the hedged oil.

There are some positives to hang onto, and I don't think this is a dead dog yet.

And don't count out Nigerian Bank funding coming in ;-)

The £1.20 price spouted was a generalisation amongst institutional investors what they consider to be an acceptable bid prior to the Kurdistan news.

DYOR as we always say, But Afren's Assets and production upgrades are not worth didly squat not to mention cashflow, they can get out of this with a little help from thier friends and a good CEO

tuppence?

http://www.thisismoney.co.uk/money/markets/article-2929140/Afren-heading-judgement-day-investors-weigh-200m-cash-call.html

less?

28 Jan Westhouse... 2.00 Sell
27 Jan Westhouse... 90.00 Neutral
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How clever are these brokers !

That's so funny..