Junior energy firm Afren announced Friday that it will receive an extra $93 million in net cash proceeds, following a difficult financial year.
Holders of the company’s 2016, 2019 and 2020 notes have agreed to subscribe for further new senior notes up to the maximum level permitted of $369 million. This will result in Afren receiving an additional $93 million to the $200 million interim funding announced in April 2015.
The development follows Afren’s 52 percent revenue decrease from 1Q 2014 to 1Q 2015. Afren’s recorded revenue in 1Q 2015 was 138.7 million, compared to $269 million during the same period in 2014. The fall in revenue was due to lower realised oil prices and production liftings from the Ebok field, which were used to settle a net profit interest (NPI) liability, according to a company press release.
Afren Chief Executive Officer Alan Linn commented in a company statement:
"Afren has delivered a solid first quarter result despite the continuing low oil price and additional NPI liftings from Ebok. We have already significantly curtailed immediate capital expenditure and are now working with our partners to optimise forward investment in development projects in Nigeria. Business and process streamlining has commenced and we expect to begin seeing improved bottom line results from these efficiencies across the business as 2015 unfolds. Whilst interim funding is now in place, it will take time to work through historical issues and funding remains extremely tight. We will be working with shareholders in the coming weeks to explain the benefits of our proposed new funding structure and encourage them to support us in resolving our financing issues in order for Afren to deliver the long-term value and attractive future I see for the company."
Afren’s 1Q 2015 net production was 36,035 barrels of oil per day. This was above FY guidance range but in line with company expectations.
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