Alan Booth, Interim CEO of Ophir, commented:
“As per the separate strategic update, the Board is rebalancing the company’s portfolio towards a larger Asian production and cash flow base with the aim of building a stable, self-financing E&P company. The recent acquisition of assets from Santos is a considerable step towards this goal, doubling our production and operating cash flow.
“On Fortuna, we are continuing to work to deliver value for our shareholders whilst we are in possession of the licence. Reflecting the uncertainty surrounding this however, we have impaired the value of the asset to $300 million.”
Highlights for 1H’18
- Production average of 11,400 boepd, marginally ahead of expectations
- Agreed acquisition of Southeast Asian package of assets from Santos for $205 million (as at effective date of 1 January 2018); the transaction closed in September with a net cash payment of $144 million (after adjusting for the value of cash flow from 1 January 2018)
- Revenue of $102 million and net funds flow from production of $43 million
- Impairments and write-offs of $358 million, mainly comprised of $310 million relating to Fortuna
- Closing net cash of $75 million and closing liquidity of $371 million
- Production from the Santos assets has been higher than predicted during the year which has reduced the expected payback of the transaction to 30 months
- The table below summarises the outlook on a pro-forma and accounting basis:
|Units||Proforma Basis(*)||IFRS Basis(**)|
|FY 2018||FY 2018|
|Net funds flow from production||($’millions)||210||130|
|Acquisition cost (with effective date of 1 January 2018)||($’millions)||205||144|
|Gross liquidity (cash and undrawn debt facility)||($’millions)||260||260|
* Guidance on a 2018 full year pro forma basis assuming accounting for the Santos acquisition from the effective date of 1 January 2018.
** The 2018 full year financial results will reflect acquisition accounting from the completion date of 6 September 2018.
A presentation for investors and analysts will be held at 9.30am this morning. A webcast of the event will be available on the company’s website: www.ophir-energy.com/investors
Press release is available to download