Afren suitor makes request

Just as it looked like Seplat had got cold feet, the Nigerian oil company has asked for more time to consider an offer for bombed-out oil explorer Afren. It had looked like any potential deal was off after the UK firm last week slashed estimates of oil and its Barda Rash field in the Kurdistan region of Iraq, but clearly there's something here that has piqued Seplat's interest.

Clearly, any bad news is useful during price negotiations. Afren has already been plagued by a management scandal, terrorists on the rampage in Iraq and a plummeting oil price, and the shares have plunged by over 80% since July to 27p.

Afren first heard from Seplat on 22 December when it received a highly preliminary approach regarding a possible tie-up. Seplat had until 5pm this afternoon to come up with something, and although there's nothing concrete, the suitor has at least been granted an extension to the deadline until 5pm on 30 January 2015 "to enable the parties to continue their ongoing discussions."

Earlier Monday, oil industry analyst Malcolm Graham-Wood speculated that Seplat may have decided that there are "too many skeletons in the cupboard or that there is just too much in the way of due diligence to do."

Both of those assumptions might still persuade the Nigerians to walk away. We'll find out in less than a fortnight's time.

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