LONDON (Alliance News) - Oil and gas explorer Afren PLC on Friday said it has secured a higher-than-anticipated funding commitment from its noteholders, as it said revenue and its operating cash flow in the first quarter of 2015 dropped sharply year-on-year.
Afren said that holders of its 2016, 2019 and 2020 notes have agreed to subscribe for new senior notes up to the maximum permitted level of USD369 million, USD93 million more than the company had announced it would received in net cash proceeds at the end of April.
The company will use the proceeds to refinance the interim funding deal it announced in March, to fund the development of its core producing assets, and for general working capital purposes.
In a separate statement, Afren said it made a USD48.1 million pretax loss in the first quarter of 2015, swinging from a USD55.8 million profit a year earlier as revenue fell sharply to USD130.3 million from USD269 million, with its operating cash flow prior to working capital movements down to USD59.1 million from USD169.1 million.
The loss was also caused by finance costs rising to USD34.2 million from USD19.9 million and administrative costs leaping to USD32.2 million from USD6.4 million due to the company's recapitalisation, partially offset by a higher foreign exchange gain in the period.
Afren also booked USD26.5 million in impairments against its exploration and evaluation assets, compared to only USD600,000 a year earlier.
Average net production in the quarter was 36,035 barrels of oil per day, in line with the company's expectations for 2015, but the fall in revenue was driven by lower realised oil prices in the quarter and production liftings from the Ebok project in Nigeria used to settle a net profit interest liability.
For the full year, production is expected to be around 23,000 to 32,000 barrels of oil per day, which has been reduced due to lower-than-expected production from Ebok.
The company achieved an average price of USD48 per barrel in the quarter, less than half of the USD106.5 million achieved a year earlier.
In 2015, Afren said it will spend around USD400 million in capital expenditure, focused on existing operations in Nigeria.
"Afren has delivered a solid first-quarter result despite the continuing low oil price and additional NPI liftings from Ebok. We have already significantly curtailed immediate capital expenditure and are now working with our partners to optimise forward investment in development projects in Nigeria," said Chief Executive Alan Linn.
Afren shares were up 0.3% to 3.04 pence per share late Friday afternoon.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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