Investors' Room :: AFREN (AFR) Is this the next TULLOW??? - MoneyAM - Free Share Prices, Stock Quotes, Charts, News, Level2

niceonecyril - 04 Apr 2009 08:30

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Chart.aspx?Provider=EODIntra&Code=AFR&Si

mitzy - 25 Mar 2010 10:38 - 932 of 3666

I'm on Petro Matad mostly Balerboy.

HARRYCAT - 25 Mar 2010 11:02 - 933 of 3666

For those of you who have the time & inclination to read lengthy articles, this one is from last week's Shares Mag, by Tom Sieber:
"West-African based oil and gas company Afren (AFR) moved from Aim to the Main Market in December last year and will be reshuffled into the FTSE 250 index next week (Mar 22), after missing out during the shake-up in the FTSE before Christmas.
This should lead to some demand for the stock as investment funds move to attain the proper weighting. Investors should buy ahead of this technical boost with other potential short-term catalysts in the offing and the underlying story continuing to improve.
These catalysts include confirmation of an additional debt facility, to support a significant 2010 capital expenditure (capex) commitment, and an independent audit verifying the level of reserves on the 840 million market caps core Ebok field in Nigeria. The latter is likely to be unveiled when the group announces its full year numbers at the end of the month (29 Mar).
The shares fell 13% in the wake of a last months (2 Feb) operational update, amid market frustration at delays in first output from Ebok, which has been put back from May to October this year, and concern about the potential for another fund raising. The decline could also be attributed profit-taking after last years excellent run, which saw the shares gain 227% a rise we anticipated in our Griller on the company last year (Shares, 29 Jan 09). The price has recovered since the beginning of this month to 94.5p and is up 8% so far in 2009.
The deferment at Ebok is a result of appraisal drilling last year which encouraged the company to reprioritise the development of the field. More encouragingly still, this drilling also led Afren to increase its own reserves estimate on the field from 153 million barrels of oil to 209 million barrels. In addition the year-end production target of 35,000 barrels of oil per day remains unchanged.
The group, which also has assets in Ce dIvoire, Ghana, Gabon and Congo, does face a challenge in terms of funding the development of Ebok, and has increased its planned capital expenditure for this year to $430 million. Afren is in advanced discussions to secure an additional banking facility of $300 million which would provide it with further financial flexibility. In addition, broker Evolution Securities estimates an oil price of $70 a barrel across 2010 will mean cash in of $640 million against cash out of $580 million.
Afren is also drilling two potentially high impact exploration wells in 2010 Ebok Deep, which is expected in the first half of this year and OML 115.
Further out the scale of the opportunity is clear. The group has excellent relationships in Nigeria - its former chairman is the main advisor on petroleum to the Nigerian government - and last June the company created a subsidiary there which will negate the need to form partnerships with other indigenous companies to acquire assets in the country. This will enable it to take material interests in some substantial oil and gas assets in the country and benefit from fiscal terms specific to marginal fields.
Prior to the launch of First Hydrocarbon Nigeria the firm had to partner with a local firm in order to benefit from more generous terms, which see a profits tax of 55% to 60% and no cap on the oil price compared with the more typical 80% tax rate and oil price cap.
First Hydrocarbon has been established with the support of two leading financial institutions in Nigeria First City Monument Bank and Guaranty Trust Bank and with 170 discovered but undeveloped fields in Nigeria, holding an estimated 3.5 billion to four billion barrels of oil or equivalent, there is plenty for Afren to go after."

jimmy b - 25 Mar 2010 11:30 - 934 of 3666

Thanks for posting that HARRY ..

niceonecyril - 25 Mar 2010 13:03 - 935 of 3666

Thanks Harry,taking the 35kbopd at $80bo then roughly 1.8m making well over 600m a year revenue. With 209m P2 reserves thats a well life of over 17 years,
just for the present Ebok (not including the deeps)discovery.I think Monday will make for some very interesting reading,so here's to Monday?
cyril

blanche - 25 Mar 2010 16:42 - 936 of 3666

1.04 finish. Don`t know about you people but i think a Whoopee! is in order. And roll on tomorrow.

ellio - 25 Mar 2010 16:59 - 937 of 3666

Looks like 120 if the results are good and maybe a massive over spike to 150 is not out of the question medium term, that's a lot of money backing these guys, either they've got a great salesman or the prospects are incredible. One would hope there is something in the background to tempt this financial backing.

required field - 25 Mar 2010 17:11 - 938 of 3666

It's going to have production like Tullow Oil by the end of the year...there's no doubt that with oil holding the $80 mark that this is undervalued on nearterm earnings.....the sp has got to go higher !.

cynic - 25 Mar 2010 17:24 - 939 of 3666

+/-$80 is certainly the (new) natural level for crude

mitzy - 25 Mar 2010 18:05 - 940 of 3666

and $100 plus in 2 months time dont forget..

cynic - 25 Mar 2010 18:12 - 941 of 3666

can't work out how to blow a raspberry on here otherwise i would

required field - 25 Mar 2010 23:48 - 942 of 3666

Mitzy ? where do get the idea that oil is going to jump $20 ?....not impossible...but improbable.....

jimmy b - 26 Mar 2010 01:44 - 943 of 3666

Great finish today , someone has a lot of confidence in the company to back them with that sort of cash.

blanche - 26 Mar 2010 07:34 - 944 of 3666

Its such fun this thread

mitzy - 26 Mar 2010 08:10 - 945 of 3666

rf I am expecting a major terrorist incident in early 2010.

Balerboy - 26 Mar 2010 08:22 - 946 of 3666

I wouldn't disagree with mitzy on that one...it's been over due for sometime.

cynic - 26 Mar 2010 08:23 - 947 of 3666

but even if oil then spikes, though the reverse may happen, it will be no more than a temporary blip

mitzy - 26 Mar 2010 08:34 - 948 of 3666

Could be cynic but if it involves Iran who knows.

jimmy b - 26 Mar 2010 11:57 - 949 of 3666

Hopefully this will go up on it's own merit without a terrorist incident.

Balerboy - 29 Mar 2010 07:55 - 950 of 3666

what a lovely RNS....why can't they all be like this one. should rise nice and steady from here on.

blanche - 29 Mar 2010 08:02 - 951 of 3666

Brilliant rns! Onwards and upwards fste 100 here we come.

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AFREN (AFR) Is this the next TULLOW??? (AFR)