4th Jul 2006 07:01
Afren PLC04 July 2006 Afren plc (AIM: AFR) US$50 million Convertible Bond Issue London, July 04, 2006 - Afren plc ("Afren" or the "Company") announces theclosing of the private placement of US$50 million equivalent in British Poundsof Convertible Senior Unsecured Bonds due 2011 (the "Bonds"). Background The proceeds from the issuance of the Bonds will fund Afren's ongoing investmentin its diversified portfolio of assets. The closing of the financing followsthe significant portfolio upgrade announced on 1 June, to develop the Okoro andSetu fields offshore Nigeria, with estimated recoverable reserves of 35 to 60million barrels of oil. According to the Production Sharing and TechnicalServices Agreement, Afren will be entitled to 90 percent of the production torecover appraisal and development costs of the Okoro and Setu fields. Afren alsoreceives 50 per cent of profit oil pre- and post- recovery of its appraisal anddevelopment costs. Afren has contracted the Seadrill-7 Jack-up drilling unit for two wells offshoreNigeria. The Seadrill-7 is currently on location in Nigeria with anotheroperator. Appraisal and development drilling on the Company's offshore Nigeriafields is expected to commence in Q4 this year, and the Company is targetingproduction of 15,000 to 20,000 barrels of oil per day by 2008 from its existingportfolio. As a result of recently announced transactions, Afren is well positioned with adiversified portfolio of 10 assets across Nigeria, Nigeria Sao Tome &Principe, Gabon and Congo comprising production, near-term development andexploration assets. Summary of the Bonds The Bonds, privately placed with institutional investors, were issued at 100 percent. of the principal amount and denominated in British Pounds. The Bonds beara coupon of 9 percent per annum (payable semi-annually), mature in 2011 and areconvertible into ordinary shares of the Company. The conversion price of 60pence per ordinary share, was set at a 25 percent premium to the pricedetermined in the pricing period leading up to closing. The Bonds also containother terms, including anti-dilution provisions effective in the event ofcertain future issuances, a bondholder put option, payable in cash or shares (ata discount to the share price during the period prior to the payment) at theCompany's option, a Company call option, and the ability to make coupon paymentsin cash or shares (at a discount to the share price during the period prior tothe payment) at the Company's option. Jefferies International Ltd acted as SolePlacement Agent for the Bonds. Brian O'Cathain, Chief Executive, commented: "Afren has made significant progress in 2006. The agreement with Amni todevelop the Okoro and Setu fields offshore Nigeria underpins our targetproduction of 15,000 to 20,000 barrels of oil per day in 2008. We will commenceappraisal and development drilling in Q4 this year. Following this financing weare in an even stronger position to continue to create significant shareholdervalue." Enquiries: Afren +44 20 7182 1800Brian O'Cathain [email protected] Shahenshah [email protected] Pelham Public Relations +44 020 7743 6673James Henderson [email protected] Haythornthwaite [email protected] Background information Afren Afren (www.afren.com) was founded in December 2004 by a management teamincluding Dr Rilwanu Lukman with the vision to become the leading pan Africanindependent Exploration and Production company. Since its listing on the AIMmarket of the London Stock Exchange, Afren has rapidly expanded its portfolioand the management team has delivered ten assets in the Joint Development Zoneof Nigeria Sao Tome and Principe, Nigeria, Gabon and Congo. Afren will continue to add to its diversified portfolio of production, near termdevelopment and high impact exploration with the overall objective of creatingsubstantial shareholder value. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AFR.L