A Review of the Nigerian Energy Industry

Seplat gets January 30 deadline for takeover of Afren

20 January 2015, Lagos – As the initial deadline given to the Nigerian independent exploration and production (E & P) company, Seplat Petroleum Development Company, to indicate whether or not it intends to make a firm offer for the takeover of the United Kingdom-listed Afren Plc, expired on Monday, the company has received an extension to the deadline.

seplat-logoSeplat confirmed earlier this month that it had made a preliminary approach to take over Afren and that it had issued a January 19 deadline to firm up the deal.

But Afren has extended the deadline to January 30 for SEPLAT to either announce a firm intention to make an offer for Afren or announce that it does not intend to make an offer for Afren.

“The board of the company has received the consent of the UK Takeover Panel for an extension to the deadline until 1700 hours on 30 January 2015 to enable the parties to continue their ongoing discussions,” Reuters quoted Afren as saying in a statement on Monday.

THISDAY had reported exclusively quoting industry sources that consolidation and acquisitions were underway as oil prices continued to their slump.

Seplat, which lost out on the assets that Shell divested in October 2014, has been on the hunt for acquisitions in Nigeria, encouraged by falling oil prices.

SEPLAT had in July 2010 acquired a 45 per cent participating interest in three producing assets –OMLs 4, 38 and 41 located in the prolific western Niger Delta basin of Edo and Delta states, which include Oben, Ovhor, Sapele, Okporhuru and Amukpe fields.

The company, which is listed on the Main Market of the London Stock Exchange and Nigerian Stock Exchange in 2014, has continued to deliver growth since inception.

Afren has been plagued by high-level corruption that resulted in the dismissal of its founder and chief executive, as well as a recent slashing of resource estimates at a Kurdistan oilfield.

Financial Times reported yesterday that the news that Seplat has another two weeks to firm up an offer for the troubled UK explorer was not enough to completely reverse losses for its shares.

According to the report, Afren’s stock erased some earlier losses, but remained 6.4 per cent lower, after disclosing UK regulators had given Seplat until January 30 to make a formal offer for the company.

The more than 50 per cent plunge in oil prices since June has lifted speculation about consolidation in a sector that in recent years has become accustomed to oil trading above $100 a barrel.

Even before crude’s slide quickened Afren was grappling with a loss of investor confidence after announcing in July an investigation into senior management.
Three months later, the company dismissed its chief executive officer and chief operating officer.


– This Day

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