Afren secures additional debt funding as it posts drop in first-quarter revenue

Oil and gas explorer Afren said on Friday that it has secured additional debt funding, as it posted a drop in first-quarter revenue.

Afren said its noteholders have agreed to subscribe for further notes up to $369m, adding $93m in net cash proceeds to the amount the company announced in April.

It will use the proceeds to refinance its previously-announced interim funding and fund the developments of core producing assets.

Afren had said in April that it secured debt funding worth $255m.

Chief executive officer Alan Linn said: “Whilst interim funding is now in place, it will take time to work through historical issues and funding remains extremely tight. We will be working with shareholders in the coming weeks to explain the benefits of our proposed new funding structure and encourage them to support us in resolving our financing issues in order for Afren to deliver the long-term value and attractive future I see for the company.”

In a separate statement, Afren posted a drop in first-quarter revenue to $130.3m from $269m in the same period a year earlier, with operating cash flow before movements in working capital down to $59.1m from $169.1m.

The fall in revenue was due to lower realised oil prices and production liftings from the Ebok project in Nigeria utilised to settle a net profit interest liability.

Average net production in the quarter was 36,035 barrels of oil per day, in line with expectations.

Linn said: "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.”