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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
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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

I think the main reason for yesterdays dumping of stock was simply investors were
given the impression that some sort funding for E Bok was done and dusted. The
realisation that this was not the case caused all the uncertainty,but it is as a long
term hold something special.
aimho
cyril

YEAH!!!!!!!!!!!!!!!!!!!!!!! BLUE!!!!!!!!!!!!!!!!!!!!!!!!!

Afren evaluating Keta block offshore Ghana

Offshore staff

LONDON -- Afren is undertaking technical evaluation of the Keta block offshore Ghana incorporating the results of the Cuda-1x well. The company also is evaluating further prospects and considering options for drilling on the block.

The Cuda-1x exploration well, drilled by the drillship Transocean Deepwater Discovery, was spudded in November 2008. The well was targeting a Cretaceous structure expected to contain 325 MMbbl of mean prospective resources in a setting comparable to those successfully proven by the recent Jubilee and Odum discoveries in the country. Unfortunately operations were terminated due to abnormally high pressures that were encountered at the top of the Cretaceous. The primary objective of the well remains untested and is still considered highly prospective, the company says.

040/06/2009

blanche ..... when was this charming bit of news released? ..... after market close?

======

found it ..... it's in the results so will already have been discounted

Found it trawling around African news sites this afternoon. Obviously didn't read the results as in depth as you. Serves me right! Should be an up day tomorrow finished quite well late on today if not blue. Nice glass vino blanco now i think.

More exploration upside to come from this company yet, they may have some debt to pay off, but the income coming very soon will be enormous.....and they have some crude hedged way above current levels....!.

In the short term momentum has it seems to have left this stock,more now a longer term investment.A worthy company to do so imho?
cyril

Most oilies are slightly down at the moment....AFR as well, but this stock has potential....no doubt about that !.

April 07, 2009

Afren Eyes Super Independent Status In Africa But Investors Seek Reassurance On Financing Of Ebok Project





2008 was a transformational year for AIM-quoted Afren plc. Or perhaps that should read another transformational year for the African E&P because this is a company that has set a cracking pace since its IPO in 2005. The AIM firm has met its IPO goals: building a diversified asset base that stretches across six West African countries, delivered first production according to timetable and has positioned itself to play a key role in the monetization of West Africas vast but dormant gas resource.
2008 was transformational because it saw the company bring the Okoro Setu field in Nigeria onstream in June, thereby beating its 15,000 barrel per day production guidance for the year. Those maiden production barrels saw the company post revenues of US$42.5 million in 2008 and a pre-tax loss of US$56 million. The company also acquired Devon Energys former assets in Cote dIvoire, adding another 5,000 boepd to the production tally in September to take the year-end run rate to 27,000 boepd. And, perhaps most importantly, there was the appraisal of the Ebok discovery in Nigeria, which now looks set to be a material 52 million barrel development with upside potential of double that with first production of 50,000 bpd in 2010.

As Galib Virani, head of acquisitions and investor relations, pointed out at oilbarrel.coms 24th conference in the City of London last week, this would put Afren on track for an exit rate of 65-70,000 boepd by the end of 2010, a number that puts it in line with City darling Tullow Oil and ahead of E&P stalwarts like Cairn Energy, Venture Production, Premier Oil and Dana Petroleum. This is impressive stuff for a company that was only founded four years ago. Chief executive Osman Shahenshah said 2009 looks set to be another year of change for the company, marking a new paradigm for Afren as the Ebok development provides a visible 2010 exit rate of over 65,000 boepd and puts the company well on its way towards its ambition to become a super independent in Africa.

But this ambition comes with the usual health warning that is a symptom of these credit-choked times: subject to financing. Although Afren removed US$70.9 million of debt from its balance sheet last year after the 100 per cent take up of an early Convertible Bonds conversion offer, this is still a highly leveraged balance sheet with net debt to equity at the end of the year of 82 per cent. Having drawn down the majority of the Okoro facility, total debt at the year end amounted to US$405.2 million of which about US$86 million is repayable this year.

The company had year-end cash reserves of US$117.7 million, subject to short term restrictions in Nigeria and Ghana. In Nigeria, for example, there are restrictions on how cash can be used: cash flows generated from the Okoro field can only be used on field expenditure and the Okoro loan facility until the completion of certain start-up tests in Q2 2009. At the end of March, the company had a cash balance of around US$60 million.

There is some comfort for investors, however. The company is strongly cash generative, with a 43 per cent operating netback at an oil price of US$40 per barrel. And a significant of that production is hedged: 100 per cent of CI-11 oil production at an average US$85 per barrel to mid 2012 and 14 per cent of Okoro production at an average US$54 per barrel to end 2010. Although the company said it is monitoring its short term cash requirements with care, it does expect to have sufficient financial resources to cover its budgeted expenditures through 2009.

Investors should also take comfort from the fact that Afren has, to date, delivered on its promises. It hit its production target when Okoro Setu came onstream in mid-2008: that field, which was delivered at breakneck speed, just two years from farm-in to first oil, is now outperforming expectations by around 47 per cent. In Cote dIvoire, the company has delivered a 10 per cent uplift in production since assuming operatorship. It has put in place the building blocks of a pan-African portfolio, with projects in six countries, and is stitching together the commercial alliances to play a role in the monetization of West African gas, with co-operation agreements signed with E.ON Ruhrgas, African LNG Holdings Limited, EdF and Gasol.

And now there is Ebok, which looks to make a material addition to the portfolio. This is an undeveloped oilfield, 50 km offshore in 135 ft of water in an area surrounded by producing ExxonMobil fields that pump some 850,000 bpd. Ebok was discovered in the late 1960s by Mobil and appraised in the 1970s. Afren drilled the Ebok-4 appraisal well in late 2008, a well that exceeded pre-drill expectations. The well encountered a total gross oil column of 284 ft in high quality reservoir sands and produced 1,450 bpd under drill stem testing. The oil was 20 to 25-degree API.

An independent assessment of the in-place and recoverable oil reserves confirm a P50 oil-in-place number of 148 million barrels, with recoverable reserves of 52 million barrels with additional upside of 54 million barrels in the Ebok West and Ebok North Fault Blocks. A field development plan will be submitted shortly, envisaging an early production system that will deliver fast-track production of 25,000 bpd in early 2010 with full-field development of 50,000 bpd by year-end.

This is a promising development but investors will be keen to see this project, so key to the companys projected growth trajectory from 2010, fully financed sooner rather than later. This is a highly geared balance sheet and these are tough times for debtors but, for now, this looks like a company with the kind of quality asset base and management expertise to continue to deliver through the lean times.

<- Back to: Oilbarrel.com Newsletter Print this news

A broker's note not sure how recent it is

'The company has a number of major banks as shareholders as well as the Sojitz Corporation, with which it has a JV that aims to invest US$500m in energy projects. Afren successfully raised 119m through an equity raise at 125p last year, and with its share price languishing at around 35p it is fair to say that this route is unlikely to be an option. So what alternatives are there?
It uses its existing cash and cashflow to fund the development.
It secures another debt facility similar to Okoro/Setu, secured against the asset.
Farms out an interest to a major.
Makes this the first JV deal with Sojitz.
It is likely that Afren will be prudent and maintain its cash and use cashflow to pay down debt in the short term.
Given the state of the financial markets and the interest payable on debt, we do not think this is an attractive option either.
Farm-outs take time to negotiate and do not generally favour those that want quick deals, so this option also seems unlikely.
Therefore, the Sojitz partnership would appear to be the most likely option to fund Eboks development. We feel that this will be the first project to be announced under the terms of the JV.
All of this is very premature; Afren is still at the early stages of determining how Ebok is developed and this will ultimately dictate how much it will cost.
We continue coverage with a BUY recommendation and a target price of 103p. This target price is derived from the NAV of Afrens producing 2P reserve base. Our oil price assumptions are: 2009 US$45/bbl; 2010 US$60/bbl; and 2011 US$65/bbl'

Lets see if AFR can close 'Blue' seems it has recovered very well on the intra day chart.

Placing of stock annouced this am, could be as much as 50% dilution?
cyril

A bit of an over-reaction at the moment to what is, in my view, good news assuming that the placing is successful?

Oil and gas explorer and producer Afren plc is planning to raise around $125m through a share placing.

It is expected that trading in the new shares will commence on 5 May.

The firm said production of 15,000 to 25,000 barrels of oil per day is expected from the Ebok field in Nigeria in the first part of next year from an early production system rising to 35,000 to 50,000 bopd by the end of 2010 from full field development.

as market cap looks to be only 165m, does that not effectively double the number of shares in issue and thus halve their value?

surely i have that wrong ...... and yes of course it will equally mean that (most of) the Ebok field stays in-house

By my calculations : this means 357 million new shares...(I might be wrong)....move to the main market...we will be able to put this in an Isa soon and a lot more people will buy this stock....production at the momment of 26000 barrels per day and this little company is moving very very fast....this placing today is not bad news.....!.

all possibly or potentially true, but that was not my question

Forget about the number of new shares...it could be somewhere between 200 to 350 million....!....one thing is for sure they will producing a hell of a lot in about 18 months time....promising little company this....and boy ! do they move fast or what ?.

i am not actually disagreeing .... i was just trying to determine if i was as dumb or even dumber than i look! ..... so to ask again, will this dilution technically halve the vlaue of the shares? ..... i think it does

Cynic, yes the number of shares in issue will near enough double, though we don't yet know what the placing price will be. My point is that AFR is very undervalued in comparison with, say, TLW and they say "Afren believes that it is now appropriate to increase its equity capital base and strengthen the balance sheet to finance the EPS of the exciting Ebok development. It is intended that Phase Two of the Ebok development will be financed out of internally generated cash flow.", so no more borrowing intended. They are already reducing existing debt from cash generated so I think with the increase in sales, in the short term, made possible by raising funds through this placing is excellent news.