Equatorial Guinea

Overview

Block R is located in the south-eastern part of the Niger Delta complex, close to numerous significant oil and gas discoveries made in the Nigerian sector, including Akpo (600MMbbl of condensate and 1.2Tcf of gas), Usan/Ukot (600MMbbl of oil and 250Bcf of gas) and Zafiro (1,200MMbbl of oil). The block lies in water depths ranging from 1,300 to 2,600m and has a gross area of 1,674km².

Interest

The Group has a 100% paying interest with the state oil company, GEPetrol, being carried through exploration for its 20% beneficial interest (ie the Group bears the full cost of exploration during the exploration phase but receives a 20% reimbursement of such costs from GEPetrol in the period after discovery).

Exploration

Three wells were drilled in Block R in late 2008, two of which (Fortuna-1 and Lykos-1) discovered significant volumes of dry gas.  Fortuna-1 tested a seismic amplitude-supported prospect in a deepwater clastic fan which was deposited in front of the developing Niger Delta thrust belt and the well intersected a number of gas columns in slope channel facies.  Lykos-1 tested a four-way dip closed structure, also with strong seismic Direct Hydrocarbon Indicator (DHI) support.  There are a large number of Lykos look-alike prospects within Block R, many of which have been significantly de-risked by the Lykos-1 result.  The third well, Bythos, tested a large thrust-related, anticlinal structure with multiple stacked target horizons. The well encountered excellent reservoir sections although these were water-wet.  Hydrocarbon shows while drilling do however, suggest the presence of an oil charge system in the area.

Ophir entered the two year First Extension Period for Block R on 18 April 2010.  This term carries a one well commitment, which has already been met by drilling the Lykos-1 well.  Appraisal locations have been declared over the Lykos and Fortuna discoveries.

Prior to drilling, only c 30% of the Fortuna prospect was covered by 3D seismic data.  To properly evaluate the discovery, a new 1,050km2 3D seismic survey was acquired in May 2009.  This survey covers the full extent of the Fortuna discovery as well as imaging the area along strike of Fortuna, to explore for similar features in front of the thrust zone. The New Fortuna 3D survey also extends the seismic coverage to the north-west, into an area which is best located to receive oil charge from the north.

Ophir believes that the gas volumes in Block R are likely to be in the order of 2 to 4Tcf with additional upside potential in as-yet untested play types and could therefore form the basis of a commercial development with the potential to produce up to 400MMscfd.  A number of subsurface and engineering studies have been carried out with a view to assessing the alternate development schemes.  These include both a pipeline back to an existing LNG plant on Bioko Island where the gas could underpin a second LNG train and an independent Floating LNG (FLNG) development.  Ophir is in discussion with the Government of EG, as well as other stakeholders in the area, to identify ways in which the project can be moved forward as efficiently as possible.  In parallel with these studies the new seismic data is being evaluated and an appraisal drilling campaign for the Fortuna and Lykos discoveries, which is likely to include further exploration drilling, is being planned.

For further details please refer to a presentation made by the Company at the Second Equatorial Guinea Gas Conference in Malabo in May 2010.

Licence Details

Licence Name	Block R
Basin	Niger Delta
Gross Area	1,674km2
Depths	1,050 to 1,950m

Licencee:	Interest:
Ophir (Operator)	80%
GEPetrol (JV Party)	20%

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• Equatorial Guinea Basin

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