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Afren....plans to allocate capital to high-margin producing assets
in Nigeria

Afren snags $255m in debt funding, swings to full-year loss

, May 1, 2015

Beleaguered oil producer Afren said it had secured $255 million from its bondholders and was in talks for a wider recapitalisation plan to be completed by the end of July.

Afren took nearly $2 billion in impairment charges and write-offs in 2014 as a result of a fall in crude oil prices and the wiping out of reserves at its Barda Rash oilfield in Iraqi Kurdistan.

The company said on Thursday it planned to allocate most of its capital in 2015 to its high-margin producing assets in Nigeria.

Afren said it expected production for the year to average between 23,000 and 32,000 barrels of oil per day (bopd), far below its 2014 production of 31,819 bopd.

The company reported a pretax loss from continuing operations of $1.95 billion for 2014, compared with a profit of $140 million a year earlier. Revenue fell 42.3 per cent to $946 million.

Afren has also been struggling with a failed sale to Nigeria's Seplat Petroleum Development Co and the dismissal of top executives last year.

Afren said it was undertaking a wide-ranging review of its portfolio and targeting selective divestments this year.

Afren defaulted on its 2016 bond coupons and sought deferrals on interest payment on its 2019 bonds earlier this year.

"The interim funding is the first step and it allows us to continue as a going concern, and moves the business forward," chief executive Alan Linn told Reuters.

Former Roc Oil CEO Linn, who was named Afren's chief earlier this month, said additional funding would be available to the company through the financial restructuring sought under the agreement with bondholders.

Afren had delayed reporting full-year results pending completion of the agreement with its bondholders.

Shares in Afren closed up 1.5 per cent at 3.3 pence on the London Stock Exchange on Thursday. - Reuters




Tags: secure | charge | July | recapitalisation | Afren |

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