Afren Closes $50 Million Convertible Bond Issue
Afren plc has closed a private placement of US$50 million equivalent in British Pounds of Convertible Senior Unsecured Bonds due 2011.
The proceeds from the issuance of the Bonds will fund Afren's ongoing investment in its diversified portfolio of assets. The closing of the financing follows the significant portfolio upgrade announced on 1 June, to develop the Okoro and Setu fields offshore Nigeria, with estimated recoverable reserves of 35 to 60 million barrels of oil. According to the Production Sharing and Technical Services Agreement, Afren will be entitled to 90 percent of the production to recover appraisal and development costs of the Okoro and Setu fields. Afren also receives 50 per cent of profit oil pre- and post- recovery of its appraisal and development costs.
Afren has contracted the Seadrill-7 Jack-up drilling unit for two wells offshore Nigeria. The Seadrill-7 is currently on location in Nigeria with another operator. Appraisal and development drilling on the Company's offshore Nigeria fields is expected to commence in Q4 this year, and the Company is targeting production of 15,000 to 20,000 barrels of oil per day by 2008 from its existing portfolio.
As a result of recently announced transactions, Afren is well positioned with a diversified portfolio of 10 assets across Nigeria, Nigeria Sao Tome & Principe, Gabon and Congo comprising production, near-term development and exploration assets.
The Bonds, privately placed with institutional investors, were issued at 100 per cent. of the principal amount and denominated in British Pounds. The Bonds bear a coupon of 9 percent per annum (payable semi-annually), mature in 2011 and are convertible into ordinary shares of the Company. The conversion price of 60 pence per ordinary share, was set at a 25 percent premium to the price determined in the pricing period leading up to closing. The Bonds also contain other terms, including anti-dilution provisions effective in the event of certain future issuances, a bondholder put option, payable in cash or shares (at a discount to the share price during the period prior to the payment) at the Company's option, a Company call option, and the ability to make coupon payments in cash or shares (at a discount to the share price during the period prior to the payment) at the Company's option. Jefferies International Ltd acted as Sole Placement Agent for the Bonds.
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- Afren Requests Suspension of Shares (Jul 15)