Afren - Re: AFR Stream Log - Back to Afren, I strongly...

Back to Afren, I strongly believe this firm is deep value. There are 285 million barrels proven and probable (2P) reserves priced at somewhat more than $3 per barrel. There are contingent resources of about 810 million barrels as well. This should be supportive for future growth in 2P reserves averaging down valuation on a per barrel basis. The valuation based on its combined proven and probable reserves and contingent resources dropped below US$1 per barrel. Moreover, the company is increasing its scope to bring new production on stream from two different platforms (named CFB and NFB) as well as several projects (Okoro, Okwok, OML26 and OML113). Afren management has guided expecting to deliver strong production and cash flow growth in 2015 and beyond. I believe a turn in rating metrics should be a most likely scenario.