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Afren

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Afren
Company typePublic (LSE: AFR)
IndustryOil and Gas
Founded2004
FounderEthelbert Cooper
HeadquartersLondon, United Kingdom
RevenueUS$1,644.3 million (2013)[1]
US$491.0 million (2013)[1]
US$474.8 million (2013)[1]
Websitewww.afren.com

Afren plc was an international independent oil exploration and production company. It was formerly fully listed on the London Stock Exchange but is now in administration.

History

The company was founded in 2004 by the Europe-based West African entrepreneur Ethelbert Cooper, with assistance from the former OPEC president and secretary general Rilwanu Lukman, as an exploration and production company focused on Africa.[2] Most of Afren's production is in Nigeria.[3]

After the Initial Public Offering in March 2005, Afren rapidly expanded its portfolio across six countries: Nigeria, São Tomé & Príncipe JDZ, Gabon, Republic of the Congo, Côte d'Ivoire, Ghana and Iraqi Kurdistan.[4]

In March 2015, Afren reported lenders approved a three-month payment deferral for a $300 million debt facility. Afren said it won a payment deferral for a $50 million amortization payment for a $300 million Ebok debt facility that was due 31 January.[5]

On 4 March 2015 Afren defaulted on its 2016 bonds after refusing to make a $15 million interest payment in order to preserve cash for an ongoing capital structure review.[6]

In April 2015, Afren appointed Alan Linn its new chief executive,[7] following the sacking of CEO Osman Shahenshah (along with chief operating officer Shahid Ullah[8]) over allegations of unauthorised bonus payments to themselves by an Afren joint venture partner.

On 15 July 2015, Afren shares were suspended after its failure to raise enough funds to continue operating, and reduced production levels.[9]

On 31 July 2015 Afren plc released a corporate update announcing that, having failed to secure refinancing, the board of the company would file papers to put the organisation into administration. AlixPartners were appointed as administrators.[10]

On 10 August 2015 the company was delisted from the London Stock Exchange.[11]

About 130 small shareholders in Afren have written to the City regulator demanding an investigation into whether the troubled oil producer was involved in "the withholding of material information".

The shareholders have also asked the Financial Conduct Authority to investigate whether Afren operated in "potential collusion with certain bondholders".

Afren Legal Action, the group of small shareholders, wrote to Martin Wheatley, the chief executive of the FCA, last week to demand a "full and prompt regulatory investigation" into Afren's conduct.

[12]

Stakeholders criticize Blackstone's involvement in Afren Administration. Concerns over a potential conflict of interest in the process for winding up Afren, the oil exploration company, have further irked shareholders, creditors and employees of the firm, still reeling from its sudden collapse at the end of July. [13]

The plaintiff, Petroleum Zion Exploration and Production Ltd, in a suit filed at the Federal High Court, Lagos, claims that the said company unlawfully interfered with the plaintiff's transaction to purchase Afren's stake in Oil Mining Lease ("OML") 26, with a production potential over 10,000 barrels of oil per day.

Joined in the suit, as co-defendants, are PJT Partners UK Ltd, FHN 26 Ltd, Wilmington Trust (London) Ltd, Vertex Energy Ltd, Department of Petroleum Resources, and Ministry of Petroleum Resources.

Others parties are Simon Jonathan Appell, Daniel Imison and Ms Catherine Williamson (who are being sued in their capacity as UK administrators of Afren UK Plc and Afren Nigeria Holdings Ltd).

The plaintiff contends that PJT Partners disclosed the sensitive information it gathered from it (Petroleum Zion) including renegotiated terms to ACA, which made it easy for ACA to want to close the transaction.

Petroleum Zion is, inter alia, asking the court for an order mandating First Hydrocarbon Nigeria Company Ltd and or Wilmington Trust (as Security Trustees of the Sale Asset) to execute the draft SPA in the form agreed with Petroleum Zion as at 24 May 2016.

The plaintiff is also seeking $230 million as damages against PJT Partners UK for disclosing its sensitive information to competitors and an additional $8.94 million as compensation for expenses it incurred as a result of the defendants’ bad faith. [14]

On 27 October 2015, a Financial Times article reported on estimates that the sale of Afren's assets would raise only $200 million, leaving $1.7 billion of outstanding debt.[15] In September 2017, Afren's former chief executive Osman Shahenshah and chief operating officer Shahid Ullah appeared at Westminister Magistrates Court charged with money laundering and fraud, after a two-year investigation by the Serious Fraud Office.[16]

Ex-CEO and COO of collapsed oil giant, Afren Plc, charged with Money Laundering and Fraud over $400m Nigerian business deals.[17]

The administrators of Afren PLC, AlixPartners UK chase funds meant to ensure environmental clean-up.[18]

Operations

The group in 2009 produced circa 22,000 barrels (3,500 m3) of oil equivalent per day from its then-current portfolio.[19]

Okoro Setu Fields (OML 112)

The Okoro Field ("Okoro") and Setu Field ("Setu") are two oil fields located in OML 112 in shallow water offshore Nigeria, which were originally awarded to Amni - a well established indigenous oil company - in 1993 as part of the Nigerian government's indigenous licensing programme. First oil was achieved during June 2008 when production from the first two production wells drilled commenced at a rate in excess of 3,000 barrels (480 m3) of oil per day from each well. A further five wells were subsequently drilled, completed and brought onstream. The wells drilled were a mixture of horizontal and highly deviated penetrations of the reservoir intervals. The field is currently producing at a rate of 22,000 bbl/d (3,500 m3/d) from all seven wells.[20]

Ebok

Ebok is an undeveloped oil field located in OML 67, 50 km offshore in 135 ft (41 m) of water in Nigeria's prolific south-eastern producing area. The field was discovered by the ExxonMobil / NNPC JV in 1968 (M-QQ1 (Ebok-1)), and two subsequent appraisal wells were drilled in 1970 (Ebok-2 and Ebok-3). First oil was originally targeted in H2 2010[21] but was subsequently pushed back to February 2011.[22]

Notes

  1. ^ a b c "Afren plc : Preliminary Results 2013". afren.com. Retrieved 22 March 2015.[permanent dead link]
  2. ^ "Afren plc : About Afren". afren.com. Archived from the original on 21 March 2015. Retrieved 22 March 2015.
  3. ^ Wigglesworth, Robin (18 September 2012). "Africa: Funding on the frontier - FT.com". Financial Times. Retrieved 20 September 2012.
  4. ^ How Afren rewrote the rules on developing Africa's oil wealth Daily Finance, 13 February 2011
  5. ^ "Breathing room for Afren on $300 million debt payment". Petro Global News. Retrieved 3 March 2015.
  6. ^ "Cash-strapped Afren defaults on $15 million interest payment". Petro Global News. Retrieved 5 March 2015.
  7. ^ http://www.ft.com/cms/s/0/0b13f132-dd22-11e4-975c-00144feab7de.html#axzz3pkwSVjr4 Retrieved 27 October 2015
  8. ^ http://www.cityam.com/1413333227/troubled-afren-s-shares-rise-after-firing-directors Retrieved 27 October 2015
  9. ^ Harrington, John. "Most followed: Afren, ..." proactiveinvestors. Retrieved 16 July 2015.
  10. ^ G. A. Chester (31 July 2015). "All Over For Shareholders As Afren Plc Is Put Into Administration". The Motley Fool UK. Retrieved 13 February 2020. {{cite web}}: Cite has empty unknown parameter: |1= (help)CS1 maint: url-status (link)
  11. ^ "Afren Exits London Stock Exchange As Shares Are Delisted | Financial News". www.lse.co.uk. Retrieved 13 February 2020.
  12. ^ Spanier, Gideon. "Afren shareholders seek investigation". ISSN 0140-0460. Retrieved 13 February 2020.
  13. ^ "Stakeholders criticise Blackstone's involvement in Afren administration". www.globalcapital.com. Retrieved 13 February 2020.
  14. ^ Ebhomele, Eromosele (21 November 2016). "JUST IN: Company linked with minister Enelamah, others sued for $249m breach". Legit.ng - Nigeria news. Retrieved 13 February 2020.
  15. ^ "Afren's art collection on the block at Bonhams" Financial Times, 27 October 2015
  16. ^ Former Afren bosses face fraud charges after collapse - BBC News, 27 September 2017.
  17. ^ [1].
  18. ^ [2].
  19. ^ Company Overview Archived 9 March 2009 at the Wayback Machine
  20. ^ Okoru Overview
  21. ^ Ebok Overview
  22. ^ "Ebok start-up pushed back on floater delay". upstreamonline.com. Retrieved 22 March 2015.
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