UK 08:37 Wednesday, 23 September 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
I’ve been watching Afren (AFR) with great interest in recent weeks and am not convinced it is the basket case that some are saying it is, including TW as he explains HERE.
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Comments
wildrides
sounds a bit dodgy to me ………. FAST ……….. thats what you want ………… loads more cash than the sp plus an Irish sea asset thrown in .
Paul Curtis
Best way to play this is the 6.625% 2020 bonds which can buy at 43 cents versus $1 par
Probably more short term upside than equity and a lot safer at that discount to par.
Pari passu with the 11% bonds so to suffer capital loss would be enourmous haircut when spread across both issue.
Only problem is min dealing size 200K so that’s c. $90K when factoring accrued interest
Gary Newman
Paul,
Downgraded by Fitch today but still ‘B-’ which is encouraging (after the Badr Rash news they maintained B with a negative outlook at the time).
Bonds on a lot of these producers offering great returns (Enquest is another) but most aren’t looking to invest the sort of amounts needed.
Certainly not all rosy here, but for me was worth a small amount at current levels and with a market cap of £230 million. 4.8 million in option hedges in the 90s alone should be worth a fair bit – really just going on the sum of the parts being worth more than this even with debt concerns. Although did find the very recent Seplat refinancing news interesting – including the additional facility available.
Wildrides,
Not really sure I’d be comparing FAST with a FTSE250 company with this level of production – I may be wrong but didn’t think that FAST produce anything (cash in the bank is all very well but hasn’t done the likes of GBP a great deal of good, and especially if it is already earmarked/needed for drilling etc).
I still see the risk here as lower than gambling on many of the drills that people hold for, and with similar upside potential!
Certainly not recommending that anyone risks their house on it though!
seagreen2
Tom
Oh no I agree with you…certainty but must be some value there short or long term
nice balanced article! No guarantee but worth looking at
Best
Gary Newman
Seagreen,
I think Tom has a fairly polar opposite view to me on this one – note it was myself and not Tom who wrote this piece!
It was interesting to see today that Enquest had its covenants revised to a more manageable debt to EBITDA ratio and i would expect to see similar on other producers as well. Plus of course all producers will be looking to cut costs and also reduce CAPEX to more manageable levels for the coming year with adversely impacting operations too much – production still needs to increase to help ease the debt to EBITDA burden.
The real problems could potentially come at the end of 2015 when hedging ends for many companies and if oil is still this low (although it is possible some increased hedges in the latter part of 2014 and are yet to update with their latest accounts which would cover that side of things – probably be around March for many).
Afren is certainly not without risk, but I’d rather risk money here than some wildcat exploration drill, and if the outcome here is positive you’ll probably see more upside than one of those anyway.