Full Year Results Highlights:
- Delivered on key strategic objectives:
- added production cash flow to deliver through-cycle sustainability
- integrated acquired production operations whilst maintaining operational excellence
- met all key deadlines on Fortuna FLNG project; which is on track for FID in mid-2016
- high-graded the exploration portfolio; added five new plays and exited, or in process of exiting, five plays
- delivered G&A savings and acquisition synergies of $60 million
- Improved strong financial position, all commitment capex funded to 2020:
- net cash at year end 2015 of $355 million (2014: $1.17 billion)
- pre-tax cash generated from operations $122 million ($150 million on a full year pro-forma basis) (2014: cash outflow of $16.4 million)
- commitment capital expenditure of only $87 million (at the balance sheet date)
- production break-even at oil price of $15 per bbl
- revenue of $161 million ($211 million on a full year pro-forma basis) (2014: nil)
- pre-tax operating loss of $376 million, after pre-tax impairments due to lower commodity price environment of $169 million (post tax impairments of $106 million), and exploration write offs of $149 million (2014: profit of $288 million)
Nick Cooper, CEO of Ophir Energy plc commented:
“2015 saw Ophir respond swiftly to an exceptionally challenging operating environment. We radically reduced our cost base, and delivered synergies ahead of forecast on the Salamander acquisition. In the period we delivered material progress on the Fortuna FLNG Project: signing gas fiscal terms with the host Government, securing Golar as midstream provider, commencing FEED, shortlisting binding offtake offers and signing a heads of agreement with Schlumberger to participate in the project. Through these steps, the forward funding requirements of the project will be met. In parallel through 2015, we also high-graded our exploration portfolio at minimal cost and with negligible commitments; exiting five plays and entering seven new plays, two of which are post period, that are better suited to the new price environment.
“Our strong balance sheet and net cash position, plus our low forward committed capex, provide Ophir with greater financial flexibility than we have ever enjoyed. We can now confidently look forward four years, to first gas and revenues from the Fortuna FLNG Project, knowing that we are fully funded. Meanwhile today we have further reduced our 2016 capex guidance to $150-200mm as we continue to prioritise capital requirements.
“The upstream model of the past decade is clearly broken. Yet Ophir’s relatively strong financial position and quality asset base provide considerable optionality at this low point in the cycle. Exploration costs are approaching 30 year lows and quality opportunities for future growth are plentiful. Provided we continue to focus capital at assets that can deliver strong returns in the ‘new normal‘ of lower oil and gas prices then we are confident of driving superior NAV growth. In future, Ophir will more transparently report its assessment of movements in our NAV and will explicitly use this metric to align our organisational behaviour with shareholder interests. We are confident that our track record of financial prudence, low finding costs, repeated ability to monetise discoveries and innovation across our asset base will increasingly differentiate our performance for investors.”
A presentation for analysts will be held at 9.00am following this announcement. This will be webcast live through the link on the Company website: www.ophir-energy.com/investors.
Press release is available to download