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Afren: Should You Invest In A Company That Suspended And Fired Its CEO?
- Afren is an E&P company active in Africa and Iraqi Kurdistan. Although founded only 9 years ago, the company had revenues of more than $1.5 billion in 2013.
- Afren was highly profitable last year with a P/E of 2.96 (also profiting from a tax credit).
- This year things went bad for Afren, as it suffered from lower production and the suspension of its senior management.
- Nevertheless, investigations were conducted immediately and did not affirm the worst case.
- The company operates still highly profitable at a debt-to-equity ratio of 1.2 and an expected P/E of 8.6 with a huge number of projects in its pipeline.
- A $2.6 billion market capitalization company having large and promising assets in Nigeria, East Africa and Kurdistan.
- Ogo, the third largest global discovery in 2013 with gross P50 resources at 774mmboe will be a potential long-term money spinner.
- High impact exploration, appraisal and development program for 2014 with planned capital expenditure of $845 million to increase production and de-risk assets.
- Target of double digit production growth CAGR over next five years from existing assets to keep operating cash flows robust and capital expenditure financing under control.
Afren: Growing Production And Reserves, Yet Severely Undervalued
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Fri, Aug. 8, 7:04 AM
- Afren (OTC:AFRNY) has suspended its operations and withdrawn all non-essential staff from its oilfield in Iraqi Kurdistan - the first field to shut in the region as Islamic State advances closer.
- Afren's other operations in Kurdistan continue to function normally but the company said it was closely monitoring events on the ground.
Fri, Jul. 11, 5:59 PM
- As much as ~$700B oil companies have in their capital spending pipeline may no longer be needed, as the big discoveries of shale oil in recent years have added ~66B barrels of crude oil resources, enough to meet demand growth in the coming years, according to Goldman Sachs' head of European energy research Michele della Vigna.
- New projects that require oil prices to be above $80-$85/bbl to break even ought to be delayed or canceled - which could include big investments considered in Canadian heavy oil or in deep waters off shore - della Vigna says.
- It's also potentially bad news for the oil service companies that make money helping oil companies with their big projects; the winners are likely to be companies with the best roster of low-cost investments: SNP, BRGXF, BRGYY, AFRNF, STOSF.
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