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

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...

Tullows success today could be seen as positive for AFR who's acreage is also off the Ghianian coast. further east but suggesting some great potential. Its share of output is producing 27,000bopd (2 fields of 22,000+5000) to AFR.
2 recent drilling programmes have had mixed fortunes?

Cuda-1x was drilled (without reaching its primary target)but had to be p&g'ed
due to "excessive pressure" in the upper Creactious level, this is being assessed with the view of redrilling in the future(larger unit will be required to tackle this
pressure)?
Ebox the 2nd well is a success and is being checked out by a independent firm
(to confirm their own readings?),results expected along with interim results on
31stMarch (3 weeks).
Several e-mails to the company give rise to the result of this well, being a little better than good. The SP of late has been run down and looks to be well undervalued, a positive set of results will see a serious re-rating of the M/Cap.
So we have here a company drilling of the Ghanian coast (as Tullow)which could
start in time rival TLW's success??
aimho
cyril

I've bought several times as of late....crazy sp....just mad !.

RF i managed to extend my t25 (at a slight profit) to mid April, which should cover the news due?
Looking at my previous post 468, looks like i got a little rampy,so anyone who's
thinking of investing, make sure you understand the loan issue's, as explained in post 465.

Take care.
cyril

is it just me... or is this dropping a bit too much... i imagine that it is simply people getting stopped out, and perhaps in a situation whereby they feel that they are better of taking their small cash holdings out, rather than let it crash to zero...

for me, i got out during late last year, and now am slowly nibbling at it again - since 17.5p... i see soo much value in this one - in terms of the next 3 years (by the end of 2011 for example)... i mean looking at it from a production angle, if they were to simply stop all other work than their current production the numbers still stack up as being quite good... from current production - 13kbopd = Afren's share; at 365 days at $40bbl at fx 1.38 at 70% at 30% overall return - one gets about GBP 29M... 29M into 450M shares gives about 6.4p eps...

if the sp stays at 15p - that's a market cap of GBP 67.5M, meaning only pe of about 2.3....
now i know that they have a massive debt... but their deals are such that they get the cash back first, that they put in, then 50% share of the rest of production for the rest of the time... so they should have a cash hoarde that covers at least 25 to 35% of exisiting debt at end of 2008... and then following into 2009, they could keep chipping away at it...

however, it seems like Ebok can increase their bopd take to closer to 20k per day, and then there is also the gas ground that they have... and i imagine that they will also pick up another one or 2 development projects along the way...

so think that maybe people are also a bit spooked by the debt facility they have... but maybe they should not be... seeing that BNP PAribas and other banks just gave one to Tullow worth 2Billion... ohhh wellll - time will tell !!!

belisce6; Todays reason,
http://news.google.com.au/news?ned=au&hl=en&q=afren
A summurary of the news from a fellow poster.

The news re funding is old. IFC regularly fund oil companies, part of the TUllow US $2 Bn the other day was from the IFC.

New is the sale of the IFC stake in CI11. However it's not unusual. There are literally hundreds of stakes in blocks in West Africa up for sale at any time with everyone from ExxonMobil down trying to sell. The headline could be taken as a bit emotive if you want to take it that way but it doesn't mean anything other than the IFC is selling its stake via Waterous.

There are lots of people popping up to put one negative post in but I haven't seen a single fact yet and in the medium term nothing but facts matter. People are spreading lots of rumours and scare stories and some get spooked by them but peel away the rubbish and look at the facts and make your own mind up.

I just compared Afren and BowLeven share price over the last six months - almost exactly the same. BowLeven has no production, no near-term production, and has said itself it basically has no cash in the bank and needs financial help. Afren says it is financailly sound and is producing and may soon be announcing P2 reserves have more than doubled. If you look at the facts you can either say somebody knows something I don't or you can say Afren is undervalued. Afren have consistently said nobody knows of financial issues because there aren't any.


Hope this helps easy any worries?
cyril

they only hold 19% in a block which is producing a rather small portion of what afren produces... so maybe it's just the bear market effect... whereby anything negative creates loads of selling...

A reply to a fellow investor.

Guys i received this response from the company today in response to a few questions.

Dear Mr xxx

Thank you for your enquiry submitted through the Afren website.

In order to best respond to your questions I feel that it may be
beneficial to firstly update you on Afren's operations and activities
and then provide thoughts on the exogenous factors that are impacting
not only Afren but the sector as a whole.

Okoro

We successfully completed development work at Okoro in Q4 2008 and are
now producing profitably at a stable rate of approximately 22,000 bopd
from all seven wells. This marks a significant out-performance versus
the 15,000 bopd volume we previously guided towards. The project was
successfully delivered within two years from announcing the initial
agreement with our local partner, an exceptionally short lead time by
industry standards and an achievement of which we are proud.

Cote d'Ivoire

We successfully completed the acquisition of Devon Energy's assets in
Cote d'Ivoire in September 2008. Production is stable at approximately
38 mmcfd of gas and 1,600 bopd gross from upstream operations with
approximately a further 1,200 boepd of natural gas liquids production at
the 100% Afren owned Lion Gas Plant. Since Afren assumed operatorship
of the assets gross production has increased by some 700 boepd. 2009
will see the implementation of a low cost wireline workover schedule
whilst work is ongoing in planning a heavy workover/infill campaign in
late 2009.

Ebok

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.

Exploration activities

We will be drilling one firm well at the La Noumbi permit (Afren 14%) in
Congo Brazaville in Q2. This is a low cost exploration well and is
fully funded from existing resources.

General Corporate

We are looking at several opportunities in the context of the strategic
alliance with Sojitz. Whilst we cannot provide details on specific
opportunities, or offer precise timings, the acquisition alliance is a
priority for both partners and we are increasingly seeing attractively
priced opportunities.

External conditions and their impact on Afren and the sector

The fact remains that on fundamentals Afren has never been stronger or
more robust than it is today. We are currently producing approximately
27,000 net working interest boepd profitably and have a strong, visible
production growth curve which from our existing asset base alone is
expected to provide organic growth to approximately 40,000 net working
interest boe/d in 2011. Having reported a cash balance of $269 mm and
net debt of $13 mm mid year we will report a significant cash balance at
end 2008 which combined with strong cash generation from our producing
asset base ensures that we are fully funded through our budgeted work
programme.

What is apparent is that the market is currently not valuing the sector
on fundamentals, but instead on external macro factors largely driven by
the onset of the global economic crisis.

First and foremost the oil price collapse has dramatically influenced
performance of the E&P sector (Afren included). Oil has come down by
over 70% from record highs of approximately $147/bbl in the middle of
last year. The volatility witnessed in oil price, and the alarming rate
at which prices dropped has undoubtedly influenced investor's behaviour
and appetite for exposure to the E&P sector.

Afren has in place certain oil price hedges which provide a degree of
protection against oil price volatility. In Cote d'Ivoire we have
hedged all oil production out to the end of 2012 at an average floor
price of approximately $83/bbl. Furthermore we have hedged
approximately 17% of Okoro production to the end of 2010 at an average
floor price of approximately $55/bbl.

Like countless other companies we have also suffered from redemptions.
Afren is one of the most traded and liquid stocks on AIM, which resulted
in high levels of selling simply because our shares could be sold
(particularly as funds were facing redemptions and required to close out
positions).

Whilst it is almost impossible to tie the Afren share price performance
back to one specific factor, it is clear that it is due to a combination
of external circumstances that are unfortunately beyond an oil companies
control. We remain totally focused and committed to continuing to
deliver superior operational performance against our strategy and to
maintain our strict capital discipline whilst selectively pursuing high
quality growth opportunities.

We appreciate your enquiry and highly value our shareholder base. We
trust that this goes some way to answering your question. Should you
have any further questions please do not hesitate to get back in touch.

With best regards,

Afren Investor Relations

T: +44 (0) 20 7451 7900
www.afren.com

cyril

Nice letter !.

Says it all for me, Glad i topped the other day. 8-)

yeah... really seems like market makers simply inducing a steady and slow drop... cos as each day it drops a little, you get more people thinking - maybe theres something going on with this one and i should take the money i still have... but i am taking to the aproach (and time will tell whether it is correct), in accumulating steadily as it keeps dropping... cos if they announce that Ebok is ok, and will start producing in late 2010, i am sure that it'll get bak up to 20p mark rather easily...