Afren raises cash to develop oil field

Published: May 26, 2009

West African oil independent Afren has raised £84.8mn (US$126.3mn) by a placing of 265mn new ordinary shares of 1 penny each in the capital of the company with institutional investors at 32 pence per share. Merrill Lynch is acting as sole bookrunner and Jefferies International and Morgan Stanley are acting as co-lead managers. The shares were placed in April.

The funds will be used for phase one of the Ebok field in Nigeria, which will raise its production from 15,000bpd to 25,000bpd in early 2010. Afren indicated that phase two of the Ebok development will be financed out of internally generated cash-flow.

The placing represents 59.3% of the issued share capital of Afren prior to the placing. The placing shares rank pari passu in all respects with the existing issued ordinary shares of Afren, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

Afren’s annual results showed that it needs to repay a further US$86.1mn of its BNP Paribas-arranged US$230m debt this year. The company repaid US$25.1mn of the debt in February. Afren made a pre-tax loss of US$56mn in 2008, up from US$39mn in 2007.