Rumours doing the rounds with regard to Sinopec bid for Afren.
Sinopec are already involved in Kurdistan – and with politics a tad sensitive at present – Afren could offer them a more subtle way to greater involvement in the region.
Afren have yet to reveal the results/tests on Simrit-2 and 3 but many believe that these numbers (when they arrive) will be very impressive. The close proximity to Shaikan makes the licence immediately desireable for the Chinese. The data that they would gain from this licence could pave the way for a larger plan to acquire GKP’s assets.
Afren are not light on diversity either. The portfolio has hot regions like Kenya in there too which the chinese would be keen to get a foot hold in.
All in all – Afren potentially ticks many boxes and with Kurd assets under priced at present – it would be a great buy for Sinopec.
Whether they encounter competition or counter bidding or whether they bid at all is anyones guess. But 250p looks cheap based on what they would be gaining.
At 153p a share – Afren looks well underpinned based on recent ops and trading update with very little upside for exploration success priced in.
By Ben Harrington7:50PM GMT 24 Jan 2013
One tale doing the rounds is that Chinese oil company Sinopec is keen on acquiring Afren, the FTSE 250-listed oil explorer with operations in Africa and the Kurdistan region of Iraq.
Afren shares leapt 10pc on Wednesday on speculation the company will either unveil positive drilling results from its Papai well in Kenya or announce a takeover offer from a potential bidder.
Traders said Sinopec – which already has a major presence in West African oil and gas exploration following its £4.5bn acquisition of Aim-listed Addax Petroleum in 2009 – is rumoured to be interested in paying between 215p and 250p a share for Afren, down 0.6 to 151.4p.