Business model

Our operational focus is on the exploration and appraisal part of the industry cycle which typically drives the highest return on investment for shareholders. We have added producing barrels as a means of generating cash flow to fund the resource finding part of our business.

As a prospect or play is matured through the process its potential value increases, especially if a commercial discovery is made, but this comes with associated costs which generally rise as we move from prospect/licence Capture through Analysis and eventually into the Exploration phase. It is management’s responsibility to manage the risk/reward profile at each stage to ensure that shareholders’ capital is deployed efficiently to maximise returns. The asset life cycle and company’s model is summarised in the chart below.

Ophir does not think like a traditional, full cycle E&P

Ophir is BIG Exploration and little production

1. Exploration

  • Exploration is focus for creation of shareholder value
  • Unique position to deliver high graded portfolio due to strong balance sheet and minimal well commitments

2. Development

  • Self funded development activity
  • Minimal existing capital will be deployed to development activity

3. Production

  • Production is a financing stream for E&A activity
  • Reserves replacement and production are not key metric
  • Assets must break even at low oil price


Net cash at year end 2015


Commitment spend in portfolio through to 2019

Equatorial Guinea: Our business model in action

Ophir's activities in Equatorial Guinea demonstrate the success of the Company’s strategy and business model and the value that it can potentially create for shareholders.

1 Exploration

Ophir entered Equatorial Guinea in 2006. It then utilised existing 3D seismic survey. This seismic survey was used to mature a prospect inventory for drilling. In 2008 the first gas discovery, Fortuna, was made. Ophir has made six discoveries in Block R, finding 3.7 Tcf of prospective and contingent resource. In 2014 the first drill stem test was conducted on the Fortuna discovery, which flowed at an implied unconstrained rate of 180 mscfd. In 2014 the commercial framework of the project was clarified. Revised fiscal terms were signed with the government and an MoU was signed for the midstream part of the project.

2 Development

The project entered Upstream FEED in July 2015. FID is expected in 1H 2017. At this point development activity will start to accelerate.

3 Production

First production is currently envisaged in mid-2020.