Afren dealt further blow as T5 denies bid rumours

Shares in oil and gas group Afren have been hit by news that rumoured suitor T5 Oil & Gas is not interested in a takeover.

It had been reported on Monday that T5 was considering a reverse takeover of the FTSE 250 group, with Hannan Partners hired to advise and £800m raised for a bid.

But T5, which is registered as New Horizon Oil and Gas Limited, put out a statement on Tuesday morning rebuffing the rumours.

"T5 Oil and Gas announces that it does not intend to make an offer for Afren Plc," it stated.

On Monday, shares in Afren, which had been hit by major disappointment over a substantial reduction in reserve and resource estimates at its 60%-owned Barda Rash field, stabilised after another potential suitor requested and was granted an extended period of time to work on a bid.

Seplat Petroleum Development, a Nigeria-based group than made a "highly preliminary" approach in late December, successfully applied for a 11-day deadline extension to agree a merger or takeover deal.

On 12 January Afren revealed that an updated ‘competent person’s report’ at Barda Rash in the Kurdistan region of Iraq has essentially eliminated all of the gross proven and probable reserves of 190m barrels, and has revised gross contingent resources from 1,243m barrels to just 250m barrels.

Afren said it was considering its “strategic options” for the project.

Analysts at Canaccord also said Afren needs to refinance some of its debt in 2015, and progress on this “is of the utmost importance to the company’s future as a standalone entity".