Afren, Enquest Slump as UBS Says Exposed to Oil Price Slide

Afren Plc and Enquest Plc, U.K. oil and gas explorers, slumped in London trading after UBS AG said they’re more exposed than some peers to declining crude prices.

Afren, which fired its chief executive officer this week, sank 5.1 percent to 93.25 pence, the lowest level since Dec. 30, 2011, at the close in London. Enquest fell by 6 percent to a record 72.70 pence.

“Sustained low oil prices pose most risk to high cost North Sea producer Enquest where growth capex leaves debt metrics looking stretched,” UBS said today in a report. At Afren “either new funding or lower capex could be required.”

Oil at $80 a barrel would see oil companies’ net asset values drop 25 percent, the bank said. North Sea Brent, the benchmark for more than half the world’s oil, has dropped by more than $30 a barrel from this year’s peak in June to below $83 a barrel today amid a supply glut and weakening global growth.

Afren, operating in Nigeria and Kurdistan, fired CEO Osman Shahenshah and Chief Operating Officer Shahid Ullah for “gross misconduct” after a probe into unauthorized payments, it said.

The terminations follow an inquiry that examined about $433 million on the explorer’s half-year balance sheet and reviewed three transactions between the explorer and partners in 2012 and 2013. It suspended the executives July 31.

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