Oil price collapse magnifies woes of beleaguered explorers

Afren’s share price has tumbled following the discovery of unauthorised payments to senior executives, followed by a reserves downgrade at its Barda Rash field in Iraqi Kurdistan. The company had a cash balance of $235m at 31 December 2014, but said on 27 January available liquidity was significantly lower “as a result of restricted and segregated cash balances in place to address operational requirements”. The company is in talks with the lenders of the $300m Ebok debt facility with a view to deferring the $50m amortisation payment due on 31 January, and is considering whether to use a 30-day grace period for $15m of bond interest due on 1 February while the board reviews the capital structure and funding alternatives.