- Since the 26 January 2016 announcement of a non-binding Heads of Terms Agreement with Schlumberger for upstream participation, Schlumberger has satisfactorily completed its technical due diligence. However, Ophir and Schlumberger have been unable to complete the transaction on the terms agreed in the Heads of Terms. As such, discussions between the parties have terminated.
- Notwithstanding this the project still represents a technically and financially attractive project for Ophir and its shareholders. The Schlumberger agreement was one of several options being reviewed as a basis for development of the project and delivery of value to shareholders.
- Ophir continues to progress the project. After completion of the upstream FEED studies, and EPCIC bids having been received as planned earlier this month, the forward upstream capex requirement from FID to first gas has been further reduced from $600mm (gross) to between $450-500mm (gross).
- Ophir has remained in active discussions with a number of other parties with regards to participation in and funding of the Fortuna FLNG Project. These discussions include upstream equity participation, vendor financing and pre-sales of gas.
- Offtake selection has progressed to a decision between three alternative solutions. Fully-termed LNG sales agreements are nearing completion.
- Negotiation of the mid-stream chartering agreement with Golar is near complete.
- The Development and Production plan was submitted to MMIE on schedule and in accordance with the PSC in March 2016.
In light of the additional time required to fully develop these options to reach binding agreements, we now expect to make FID during 4Q 2016 with first gas now forecast for early 2020.
Nick Cooper, Chief Executive Officer of Ophir, commented:
“The Fortuna project workstreams are progressing towards FID. We have been reviewing a number of options and our discussions continue with other quality counterparties that can offer an attractive source of funding. In addition, the reduction in the capex to first gas has lowered the project breakeven oil price to approximately $40 per bbl.
“We continue to work closely with Golar, the prospective offtakers and the other potential partners and remain confident that we will take the FID in 2016.”
The Company will host a conference call for analysts and investors today at 0800 GMT. The dial-in details are below:
Dial-in number: +44 (0) 2071 928000
The call will be recorded and made available on the following number shortly after it finishes:
Replay: + 44 (0)1452550000
Press release is available to download