Commenting on the first half results, Nick Cooper, Chief Executive, Ophir Energy said:
“Ophir’s strategy is to be a sustainable explorer, focussed on delivering NAV per share growth by finding (securing) resources at low cost and then monetising them in the way that maximises the price achieved.
Ophir’s financial strength and the discretionary nature of the capital spend across our portfolio provides Ophir with optionality to selectively invest in organic, and inorganic, opportunities that offer the best project returns and therefore the greatest growth in NAV per share.
Having spent two years high-grading our exploration portfolio, we are now preparing to return to a considered, prudent pace of exploration drilling from late 2016 to take advantage of the significantly lower exploration costs, while continuing to focus on monetising our previous exploration successes.
In Equatorial Guinea, Fortuna is now a low cost upstream project, “technically ready” for FID and we are constructing a value chain that offers potentially the most cost-effective greenfield LNG supply available today. Ophir will progress the monetisation of Fortuna in a way that protects Ophir’s balance sheet, that actively manages our exposure to development risk, and that maximises NAV per share.
Ophir’s cash flow and net cash position provide sufficient funding to make discretionary investments across the portfolio. Our cost rationalisation programmes have delivered substantial savings in ‘running costs’ and these efforts continue, thereby minimising NAV per share erosion and maximising shareholder returns.”
- Revenue of $52 million (1H 2015: $86 million) with a further $6m (1H 2015: $5m) for Sinphuhorm accounted for using the equity method
- Pre-tax loss of $70 million (1H 2015: $123 million)
- Post tax cash generated from production of $22 million1 (1H 2015: $37 million)
- Cash on balance sheet at period end of $407 million (1H 2015: $708 million, including short-term cash deposits)
- Net cash on balance sheet of $207 million` (1H 2015: $392 million)
Monetisation of Resource
- Average daily production of 11,000 boepd (including Sinphuhorm), in line with expectations
- Completed a water debottlenecking and facilities upgrade at Bualuang in September, resulting in increased water handling capacity of 75,000 bwpd and a 25% increase in oil of 2,000 bopd from initial rates
- Delivered first gas from the Kerendan field, Indonesia to the PLN power plant in August 2016
- Completed upstream FEED on Fortuna FLNG project and locked in low cost solutions until mid-2017. Discussions with potential value chain partners continue.
- Achieved zero LTIs in 1H 2016 and two years’ LTI-free operations in Thailand
Exploration and Appraisal
- High-graded exploration portfolio :
- Exited several licenses and entered Block CI-513 in Cote D’Ivoire, Ayame prospect (c. 240 MMbo of gross mean prospective resource) expected to be drilled in mid-2017
- Matured an inventory of exploration prospects in Block AD-03, Myanmar to drill-ready status
- Progressed an oil play in Block R, Equatorial Guinea jointly with Exxon with drill/drop decision to be made in 2017
- Mapped multiple leads and prospects with multi-hundred million barrel potential on the Olumi Rouge 3D in (Nkouere & Nkawa Blocks) Gabon
- Commenced Trepang 3D seismic survey in West Papua/Aru licences in Indonesia in August
- Mobilised for the acquisition of the Kerendan 3D seismic survey in September
A presentation for analysts will be held at 9.30am following this announcement. This will be webcast live through the link on the Company website: www.ophir-energy.com/investors.
1 See page 3
Press release is available to download