External Risks

Exposure to changes in the macro environment can impact our business.

Risk	Mitigants	Responsibility at functional level	Change (2014 on 2013)
Low commodity price and adverse market sentiment towards the E&P sector	Maintenance of a strong balance sheet with discipline in capital allocation and cost management across the Company. Manage capex and General and Administrative expenses (G&A) to navigate the Company through the downturn. Continue to review the Company’s cost structure and make sure it reflects the new oil price environment.	Director of Finance	↑
Global economic volatility	Act counter-cyclically to take advantage of the opportunities developing from the industry downturn. Selectively exploit the low service costs that have resulted from the drop in the oil price. Regularly review how external risks impact the Company’s strategy and remain agile to change.	Director – Portfolio & Strategy	↑
Capital constraints	Aim to internally fund core exploration and appraisal activities from the addition of production assets and monetise resources to generate cash flow. Diversify the sources of funding and apply prudent levels of debt to development and production activity to preserve balance sheet strength and flexibility. Find resources for the minimal capital outlay and then monetise them for the highest possible price. Only allocate capital to highest return opportunities following rigorous risk reward analysis. Ensure that commercial terms on new acreage reflect the changing landscape and involve minimal financial commitments with options to exit pre-drill.	Director of Finance	↑
Legal compliance, regulatory or litigation risk	The Company accords the highest importance to corporate governance matters and upholding the highest ethical standards. Activities are subject to various different jurisdictional laws, customs, fiscal and administrative regulations. The Company employs suitably experienced and qualified staff and, when required, external advisors to ensure full compliance. Improved online due diligence system capturing third party risks, analysis of those risks plus approval decisions. Legal risk assessment and due diligence (where appropriate) is undertaken for all counterparties the Company deals with.	General Counsel	→
Stakeholder sentiment	Ophir is committed to sustainable development. The Company’s approach to Corporate Responsibility underpins the way it does business. The Company continually strives to conduct operations in an ethical, responsible, apolitical, independent and transparent manner. Ophir places a strong emphasis on maintaining excellent relationships with the local communities and host country governments in the jurisdictions in which it operates. Ophir pro-actively interacts with stakeholders, maintaining regular dialogue and provision of information. All material information is released to the market on a timely basis and in accordance with all applicable regulations. There is ongoing monitoring of public sentiment towards the Company and its operations. Ophir places great importance on values they expect staff to demonstrate in order to be respected by its stakeholders.	Head of Investor Relations & Corporate Communications / Director – Security and Surface Risk	↑
Political risk	Ophir regularly monitors and seeks to understand changes taking place in political and regulatory environments and the potential for shocks to make recommendations to the Board. Ophir maintains a balanced asset portfolio across different jurisdictions. The Company strives to maintain positive relationships in host countries and work to the highest industry standards with regulators, closely monitoring compliance with the Company’s licence and PSC obligations.	Director – Security and Surface Risk	→