Afren climbs most in five years after approach from Nigeria

Afren Plc, a U.K. oil and gas explorer that previously fired members of senior management for unauthorised payments, rose the most in more than five years in London after an approach from Seplat Petroleum Development Co. of Nigeria, reports Bloomberg.

Afren gained as much as 22 percent to 58 pence, the biggest intraday jump since April 3, 2009, and traded up 5.3 percent at 50.10 pence by
11:37 a.m. in London.

“There can be no certainty that an offer will be made or as to the terms of any offer,” Afren, based in London and focused on Nigeria and Kurdistan, said in a statement.

The company received a “highly preliminary approach” for a possible combination, it said.

Seplat, which listed on London and Nigeria’s stock exchanges in April, has until January 19 to make a firm offer. The company has onshore
licenses with oil production at 60,000 barrels daily.

“The addition of Afren’s assets in Nigeria would increase Seplat’s production and cash flow materially,” Al Stanton, an analyst at RBC
Capital Markets, said in a note.

“And a deal – which helps address Afren’s corporate issues – should be well received in Nigeria.”

Afren, Ophir Energy Plc and Tullow Oil Plc were among potential takeover targets as oil prices slumped, BMO Capital Markets analysts
said last month. Brent, used to price more than half the world’s crude, has plunged about 45 percent since a high in June as world supply outweighs demand.