Seplat Energy Share Discussion Threads

[sportbilly1976] 06/2/2015 08:19

AFR rns' have all hinted at this being a merger/comboination/paper offer and so I would expect the cash element to be minimal

[lonrho] 05/2/2015 21:44

It is probable the purchases are out of the $453m deposit for investments shown on the balance sheet and as such were effectively part of cash and may have no impact on the available bank facilities as the intended purchases were known when the recent facilities were negotiated.

[dukedosh] 05/2/2015 21:12

After the $400mm acquisition of OML53 + OML55 Seplat still have a $600mm lending facility. Is a bid for Afren still a possibility?

[dukedosh] 05/2/2015 20:54

This is an interesting tweet, specially the bit in inverted commas:

Seplat Petroleum Dev ‏@SEPLATPetroleum 1h1 hour ago
The acquisition is good fit for SEPLAT & complements existing business including current gas contracts "while raising potential for new ones".

[coxsmn] 05/2/2015 20:19

Afren could be forced to break up the company and sell off its assets, Seplat could just bid for the parts it wants.

[riggerbeautz] 05/2/2015 16:42

Pretty much the same opinion unless it's a steal and someone taking a large haircut. These are decent acquisitions, but near $400million out the war chest, suggests AFR would have to be on massively attractive terms.

[sportbilly1976] 05/2/2015 16:38

dukedosh,

I'd say so...indeed I wouldn't be surprised to see a 7am rns tomorrow confirming talks are off.

Nice uptrend forming here now...hopefully this, with the rising POO can see SEPL heading back to 200p

[whiskeyinthejar] 05/2/2015 15:47

My understanding of what's possible with re-financing isn't great (that's why after following Affers for about 8 years I'm firmly out- I have a small punt on Sepl though).

But the market cap of Afr is only low because of the debt.So would bondholders accept writing off 100% of bonds ($800million) in return for 95% of company? Afren is profitable at $30 without the debt. Debt free, Afren is worth well north of $800million.

When Norwegian oiler Norecco recapitalised in December, bond to equity conversion diluted shareholders holding by 95%. It had production problems as well as poo problem.

[dukedosh] 05/2/2015 15:27

Looks like a couple of decent acquisitions on nice terms too. Importantly, we are operators of both licenses.

I wonder if this scuttles our move on Afren? Immediate market reaction may suggest so. SEPL up 4%, AFR down 13%.

[sportbilly1976] 05/2/2015 15:21

D4E will wipe the equity holders out though, given they need to raise more than the current mkt cap - in those circumstances you would want to raise more than enough.

AFR's current cap ~£120mln, financing needs over the next 12months or so ~£400-500mln (this is a guess but given the rns came when share price was 20p)

so a say £400mln at what 8p/5p a share????? thats an additional 5-8bln shares in issue on top of the 1.2bln in existance currently.

How many current holder have spare funds to partake and fully take up their entitlement?

[whiskeyinthejar] 05/2/2015 14:05

The alternative for Afr to Sepl is debt for equity I think. I can see that appealing if Sepl push bondholders too hard.

But anyone taking on Afr will face same problem if debt is not restructured - costs are too high. Seems harsh, but Barc says Afr needs $70 oil.

Anyway Sepl walking away might not be worst thing perhaps.

[sportbilly1976] 05/2/2015 13:57

Looks a good acquisition - 51MMbbls oil and 611Bcf gas for $190mln (less $18.75mln deferred based upon POO>$90 for 12mths over next 5 yrs).
$69mln already paid in 2013

Good development potential too from the shallow reserves

[talk2dubya] 05/2/2015 13:06

Onshore acquisition just announced👍👍

[dukedosh] 05/2/2015 12:36

I am wondering how many deadline ultimatums can be granted by the take over panel here.

If I was in Seplat's shoes, I would not be in any rush. Afren, on the other hand, cannot wait too long or they could face default.

I am most intrigued to see how this plays.

[riggerbeautz] 05/2/2015 11:58

Agree, but I'm not sure I'll stick around, think you know I'm already over exposed out here lol

Thought the elections stretched until the 28th? So I'm wondering if AFR have the capacity to stretch negotiations until that date, as a clearer political landscape might be a pre requisite to any deal?

One thing I'm certain of, you have to be on the inside to get the deals done in Nigeria, 6 or 7 years investing out here makes that blindingly obvious, so I'll be surprised if anyone without local connections will touch Afren if they sell out, which is why I'm prepared to stake some on SEPL and risk the downside should it not materialise.

[riggerbeautz] 05/2/2015 09:52

Duke your comment on the Nigerian government has been my thoughts too on AFR, trying to come up with viable contenders and I really don't see many that would partner an indigenous company.

[coxsmn] 04/2/2015 19:56

Article below suggests Afren would need a cash injection north of $500 million just to stay in business for the next 12 months. Then theres's the current debt mountain.

[dukedosh] 04/2/2015 18:51

With it's crippling debt pile, Afren is a dead duck without Seplat. I reckon Afren bond holders will see some Seplat paper for their bonds, but equity holders will most likely get next to nothing.

Worth bearing in mind that the Nigerian government will most likely only agree to an Afren assets takeover by an indigenous company. There's clearly not many others in a position to compete with Seplat. If there was, then I would expect a hat to have been thrown in the ring by now.

We will soon see how this plays.....

[mellowman62] 04/2/2015 17:24

It's oh so quiet B-)

[sportbilly1976] 03/2/2015 15:30

AFR sinking on the back of a Barclays note donwgrading their price target from 28p to n/a (don't ask how it can ben/a though!)

essentially saying the only hope for AFR is that SEPL step in and offer a token amount to equity holders.

1p with all debts taken on at par?

[mellowman62] 03/2/2015 12:06

Maybe.. The lack of CEO is key and the interim doesn't seem to have a clue, I'm hoping he'll grow some and sell AFR for 40p min

[sportbilly1976] 03/2/2015 12:03

mellow,

I'd say the revelation that they have segregated cash balances for capex which they can;t postpone or touch hasn't helped though...those could have been used for the $65mln due last week for a start....also that they are seemingly unable/unwilling to delay or postpone some chunky capex for 2015 too

[mellowman62] 03/2/2015 11:59

Not much has changed since shares were 150p.. Accept a temporary drop in oil price and some naughty directors pinching a small amount of cash..