I disagree that they're looking at it in that manner. What imo will make the difference is AFR's ability to ride out the current oil prices and restructure debt without too much pain. That's what can put them in a position to ignore any offer that's derisory.
A lot of the expenditure in 2014 was for Ebok and Okwok i think - in terms of the capital side of things. I'm sure we will see exploration and appraisal reduced for this year - I am hoping so anyway as want to see them concentrating on those assets that are producing. I do think we will see Ogo put on hold for now - was the biggest new discovery that year, but obviously still early stages and I'd rather they spent money on increasing production, which in turn would reduce the financial strain of debt to EBITDA ratios - can't just stop investing anything! Just my opinion though.
And the general consensus is that this will take a further hit to maybe 15/16p, why wouldn't they do that and try to take over Afren aggressively now we are in this position. Why pay 60p when the current sp is 20p and could slip further. The BOD have not done the takeover any favours for a decent negotiated price for me as they should have helped this prop above 30p during talks. It just doesn't add up to me.
I must admit i haven't been watching all the forms closely as get so many of them through (am also holding share sin another company that is involved in a takeover!). I suspect they're just aggressively churning stock via the algos we're seeing being run on the book (more than one of those in action). In terms of the short position I imagine we would find that a number of the IIs were running hedging shorts here, probably from much higher levels but it is only now that we're seeing them as previously they'd still have been net long and so wouldn't have fallen within the FCA short disclosure rules (relates to 0.5% net short positions so hedges wouldn't show up). I think that is the same on many shares and the FCA side of things is a red herring - people look on there and just assume no big shorts, not considering hedges that wouldn't be on there as far as I can make out from the rules stated - so sometimes when you see an II selling below the level they bought at they might not have lost as much money as it might first appear! I'm no expert though just my understanding from all I've read.
Hey Arsenal (come on the gunners!) They spent a lot on CAPEX last year but on operations, they continued to do well. See the cashflow statement on both the September 30th and the June 30th results. The CAPEX was to get another leg of Ebok up and running.
Im not a holder of Afren, but I'm interested in the current situation as I may want to invest,
I'd like thoughts on the company's cash position:
I had a glance at the financials - and noticed cash from operating activities reduced massively from prior year.and with the current oil prices, what is the general consensus of having enough cash in the short term to keep their head above water?
What options would management take to reduce the outflow? i.e. stop purchasing property and equipment, and stop the exploration proggramme? (i.e. the largest cash outflows)?
Garyn, forgive me jumping in on this chat thread uninvited but the Barclays 8.3's are interesting......the short is always between 0.17% & 0.2% higher than the long on every disclosure. Not sure I understand why but it does look like their shareholding in Afren is being "managed".
Also long position has increase from beginning of the year when it was 2.17% to 3.29% now (short has also increased from 2.34% to 3.49%).
Don't pretend to understand it but 8.3's do seem to show no II's have "baled" since offer went in!!
Cheers, hadn't spotted recent movements from them and the form didn't appear to show any sale or purchase (was only flicking through them but don't think it showed either?) so assumed that they'd gone back over the 1% disclosable threshold. Marshall Wace went below the disclosable 0.5% short threshold on Jan 19 as well so would still have some to close (didn't check on the FCA this morning but am assuming they're still reducing as they had been steadily).
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