Amities . l have been discreetly buying this stock since it was 39p . And the more i learn the bolder are the positions i take . .....Floated in Dec 2004 it was oversubscribed and before costs the required $15 million was raised. At the helm is ex BP head of Global exploration and Resavoir management . Furthermore a success story at Global Expo . Now Nick Johnstone wants to set up on his own . And after speaking to him l am not at all surprised . He is like a "Who s Who " of the hydrocarbon world ...He has ALL the prerequisites for success so why work for some other lackey ! .. namely connections from his ertwhistle employers . He has assembled a first class management team from ex colleauges at BP ; and is his business model is simple . AFR farms in on "Big Oils " inception upstream ; and with its scale of economy it works closely with "Big oils" fields on the look out for excellent workovers oppertunities .... Already lt has via a complicated j/v a percentage of the Sao Tome and Principe acreage -Located between the oil rich waters of Nigeria and those of Sao Tome and operated by Texaco / Chevron and Esso; and believed by many to be the new North sea . . 3D Seismic testing and magnetic graphic imagery and satellite imaging has located a labyrinth of channels leading to a main resavoir which is believed to14-15 mmbbls of oil and which would leave AFR with its share of 120/140 million barrels for NO cash outlay .To ensure early cash generation Afren has entered into a production sharing agreement in the developed Ogedeh field { adjacent to the BP operated Olowi marin field which is believed to yield 180 mmbbloe. Furthernore AFR has agreed to drill the lbekelia project for Ascent resources which is expected to produce 2,500 b/pdoe to satisfy AFR percentile share ,ln addition it is a believed resouce of several years . .. , .Not a bad start for a company with little more than six months in the making . ....and well worthy of investigation !! .....@+ J

Tuesday RNS seem to have asked more questions than answered in some investors minds,a worried IP e-mailed the company and here's his response, which i believe to be genuine?

Email from Afren:

"Thank you for your recent enquiry submitted through the Afren website.

In response to your question we commenced appraisal drilling at Ebok on 24th November 2008 using the Trident IV jack-up rig. We completed appraisal drilling operations in line with our stated timetable on 1 February 2009. We are pleased to confirm that we successfully achieved all of our pre-drill objectives which included establishing the areal distribution of the reservoir, reservoir properties and acquiring a full suite of technical data. Interpretation and analysis of the appraisal results is ongoing and we are awaiting the independent analysis and certification of this, after which a further announcement will be made on this very exciting project and the timing of the development. You will note from the Okoro development that the Company has always maintained a conservative approach to releasing robust information to our shareholders.

Furthermore we are pleased to provide you with an update on operations and performance across the rest of the portfolio:

The group is producing profitably at a total rate of approximately 27,000 working interest boepd of oil, gas and natural gas liquids.


Okoro is now producing at rates of 22,000 bopd, marking a significant (+47%) out-performance versus pre-development guidance of 15,000 bopd.


Production in Cote dIvoire remains stable at approximately 5,200 working interest boepd. Since Afren assumed control of the assets gross production has increased by circa 700 boe/d.


The company remains fully funded through its budgeted work programme and has a robust financial platform and strong capital discipline.


Afren will participate in one firm exploration well, at the La Noumbi permit in Congo, during H1 2009 and is continuing to aggressively pursue several highly attractive acquisition opportunities.


On fundamentals the company has never been stronger or better positioned to capitalise on and deliver materially value accretive portfolio growth. Should you have any further questions please do not hesitate to contact us.

Very best

Galib"

I think the key here is the term..."and the timing of the development."

Cheers

Richi


cyril

Reading between the lines it does seem good.... if the email is genuine. At the end of the day market is pricing in duster at the moment, this stock is rock bottom, any hint of good news should see good upside from here, I also wouldn't be surprised to see OPEC cutiing production again soon, they will certainly try to appear to do whatever it takes to get crude above $50 barrel, whether we believe them is a different matter.

Many producers and states will be making a loss if things continue like this, hence markets view on AFR share price at present, even though they are generating profit.

From a genuine poster, who e-mail the company, the reply also underlined the
importent points.


asked Afren this morning wether there was anything negative in recent ebok rns and I asked them that some investors have maybe percieved it as bad news the reply is below

Dear xxxxxx

Thank you for your email.

That is a complete misconception/misinterpretation. Investors should bear in mind Afren has always been very robust and cautious with respect to market guidance. Okoro is a case in point. We guided the market to 15,000 bopd and we are currently producing profitably 22,000 bopd.

We successfully completed the appraisal drilling programme and we achieved all of our pre-drill objectives which included establishing the areal extent of the reservoir, reservoir properties and acquiring a full and comprehensive suite of technical data. As per the RNS, interpretation and analysis of the appraisal results is ongoing and we are awaiting the independent analysis and certification of this, after which a further announcement will be made on this most exciting project and the timing of the development.

Kind regards

Galib

The 2nd post,

btw out of the full e-mail the following phrases were underlined and highlighted by Afren IR in last paragraph,make of that what you will ,I have

"successfully" "achieved all of our pre-drill objectives"


"the independent analysis" "timing of the development"

cyril

From a genuine poster, who e-mail the company, the reply also underlined the
importent points.


asked Afren this morning wether there was anything negative in recent ebok rns and I asked them that some investors have maybe percieved it as bad news the reply is below

Dear xxxxxx

Thank you for your email.

That is a complete misconception/misinterpretation. Investors should bear in mind Afren has always been very robust and cautious with respect to market guidance. Okoro is a case in point. We guided the market to 15,000 bopd and we are currently producing profitably 22,000 bopd.

We successfully completed the appraisal drilling programme and we achieved all of our pre-drill objectives which included establishing the areal extent of the reservoir, reservoir properties and acquiring a full and comprehensive suite of technical data. As per the RNS, interpretation and analysis of the appraisal results is ongoing and we are awaiting the independent analysis and certification of this, after which a further announcement will be made on this most exciting project and the timing of the development.

Kind regards

Galib

The 2nd post,

btw out of the full e-mail the following phrases were underlined and highlighted by Afren IR in last paragraph,make of that what you will ,I have

"successfully" "achieved all of our pre-drill objectives"


"the independent analysis" "timing of the development"

Seems we have a special result coming in the not to distant future?

cyril

A case of deja vue?

I've been looking to increase my stake as news is just around the corner,with
todays news of a 20%+ stake in Gasol (were11p)for 10%discount(sub 0.5p)so i
have bought this am. This could easily be 1+ in next the couple of years?
aimho
cyril

Any thoughts on the large sells today, over the last week it's normally been more buys ?

Also how long does it normally take for the results of the drilling to be published ?

1-may be not many investors want to hold stocks over a weekend with so much uncertainty
2-may be bad test result next week.
bit of good news below if china can may be usa will tooChinas Economy Shows Signs of Recovery on Stimulus (Update3)
Email | Print | A A A

By Kevin Hamlin

Feb. 13 (Bloomberg) -- Chinas economy is showing signs that a 4 trillion yuan ($585 billion) stimulus package is taking effect.

The worlds third-biggest economy may expand 6.6 percent in the second quarter after slowing to 6.3 percent in the three months to March 31, the weakest pace since 1999, according to the median estimates of 14 economists surveyed by Bloomberg News.

China is trying to reverse an economic slide that has already cost 20 million jobs, raising the risk of social unrest as exports plunge and the property market sags. Spending on roads railways and housing has increased prices for iron ore, put a floor under industrial output and helped to drive a record $237 billion of new loans in January.

China looks set to be the first major economy to recover from the current global meltdown, said Lu Ting, an economist with Merrill Lynch & Co. in Hong Kong. China is the only economy in the world to see significant growth in credit to corporate and household sectors after September 2008, when the financial crisis worsened to a near collapse.

The governments stimulus plan, announced in November, is beginning to gather momentum. Projects such as the building of 3.5 billion yuan of public houses in Shaanxi province and Shanghai began in December, while Shandong province started work on three new railway lines the same month.

China is committing about 1.2 trillion yuan of central government funds to the plan, which means banks willingness to fund projects is crucial. So far they are responding.

Increased my holding this week, awaiting news from Ebok, seems we have a distressed seller around? If so once cleared this will imo rise very quickly,MXP
has shown what can happen once the overhang is cleared.

Afren, the oil explorer, ticked up p to 20p with strong volumes on hopes of upbeat results from drilling its Ebok well in Nigeria due in the next couple of weeks.

http://business.timesonline.co.uk/tol/business/markets/article5729003.ece

I'll be looking for whole lot more than 3/4p rise on news, trouble is a seller
who until finished will effect the SP performance, still well undervalued imho?

cyril

may be someone else noticed. everyday in auction the price jumps 68% up for a split of a second

More evidence of success at Ebok,

From floatingproductionzone.com -

http://www.floatingproductionzone.com/zones/fps_advanced_search.aspx?hemisphere_id=0&operator_id=1204&status_id=26

Project Name: Ebok OML67
Status: Bidding
Operator: Oriental Energy Resources
Provinence: Nigeria
Modified: 2/20/2009

Please note this was changed after markets closed on Friday - interest, bidding for floating production platforms can only mean Ebok has recoverable Oil in commercial quantity .

So their looking to hire a storage vessel,nudge, nudge.
cyril

Topped up again today. No one knows where the bottom is but must be close. Time running out and one of the sellers finished.

Cyril, I saw the RNS and thought, like you, results on EBOK must be possitive.

Good luck all.

Some large sells this morning which came through later in the day, any thoughts, is this the final seller getting rid of his stock, don't understand why if the latest results are to be good.

Any thoughts ?

Another e-mail from the company to a private investor.

Thank you for your recent enquiry submitted through the Afren website.

In response to your query, we would like to firstly provide you with a brief update on the companys operations:

The group, which has successfully built a balanced portfolio of production, development and exploration assets across 6 African countries is now producing profitably at a rate of approximately 27,000 working interest boepd of oil, gas and natural gas liquids. The Okoro field in particular is out-performing all pre development expectations with current rates of over 22,000 bopd (representing a +47% out-performance). In Ce dIvoire, production remains stable at approximately 5,200 net working interest bopd of oil, gas and natural gas liquids. With regards to exploration, we hope to participate in one firm exploration well in La Noumbi during H1 2009.

We also recently completed a successful appraisal drilling campaign on the Ebok Field. The appraisal campaign achieved all pre-drill objectives, and we are currently awaiting the independent analysis and certification of the results after which we will be in a position to make a further announcement on this very exciting project and the timing of the development.

With regards to the share price it is important to note that based on fundamentals Afren has never been stronger than it is today (fully financed, producing circa 27,000 boepd profitably and positioned to deliver significant portfolio growth), and that it is essentially exogenous forces that have impacted the share price performance of not just Afren but the sector as a whole. The oil price is perhaps a prime example of this. As an oil producer we take the price as set by the market (which we have no influence over). The collapse in oil price is undoubtedly one of the key elements that has influenced investors behaviour and market sentiment towards the E&P sector. Afren is also one of the most liquid E&P stocks on AIM.

We certainly believe that the track record of delivery and growth Afren has demonstrated to date (regularly out-performing guidance and market expectations) combined with the robust financial and operational platform underpinning the company sets Afren apart, and will allow us to continue to deliver materially value accretive portfolio growth and superior operational and financial performance.

Should you have any further queries or if can be of more assistance please do not hesitate to contact us.



Yours sincerely



Investor Relations

Afren plc


cyril

Cyril, do you know what their breakeven cost for a barrel of oil is? This is crucial to whether they are making profits.

silvermead, can't be exact on that,what i can say is that they have hedged at $55
and $83 a barrel to cover the loans, but at these levels they are cash generative.
cyril

silvermead
Here's a post from a very knowledgable investor,hope it helps?

"The Company has successfully raised over $450 million in attractively priced debt and loan notes since IPO. On the face of it, although this figure appears high in comparison to the Companys current market capitalisation, the majority of this debt is ringfenced around the assets in a reserves based lending structure. Of the Companys current $430 million debt, only a $50 million senior un-secured facility and the $45 million loan notes (at labor + 2%) are non-ringfenced to the assets.

The reserve based lending facilities are amortised over a 5 year term. The facility amounts available (which have been drawn) are calculated based on the fields ability to service the debt under a very conservative banking case (which is typically below the 1P production forecast) and low oil price. This ensures that the fields will generate sufficient net cashflow to service the debt even in a low case. It is worth noting that both Okoro and Cote dIvoire are performing substantially above the forecasts used for the purpose of determining the borrowing base, and are set to continue to do so, thereby ensuring that all debt obligations (reserves based or otherwise) can be comfortably met now and in the future with significant residual free cash remaining for the company to fund further growth and expansion. As part of its reserve based lending facilities, the Company has strategically hedged a certain amount of production to further ensure that debt service obligations can be met and also to comply with certain debt covenants. The Company has hedged its oil production in Cote dIvoire out to the end of 2012 at an average floor price of $83/bbl, and at Okoro has hedged approximately 17% of production to the end of 2010 at an average floor price of approximately $55/bbl.

2009 will be a year of peak production at Okoro, with the field currently producing profitably at circa 22,000 b/d the field is significantly out-performing pre production start-up estimates of 15,000 b/d (circa +47% out-performance vs guidance). Coupled with a stable 5,200 boe/d production in Cote dIvoire the Company is now producing circa 27,000 boe/d. The Company is therefore strongly cash generative, and 2009 will see Afren pay down a further $105 million in debt principal amounts, thereby reducing the forecast end 2009 debt position to approximately $325 million (including the loan notes), approximately $280 million excluding the loan notes"


Give it a year or so, once all the current panic is over.......

cyril

Thanks cyril, much appreciated

geez... she keeps dropping by the day... got bak in, but wish i waited... wanna get some more though...