Commenting on the first half results, Nick Cooper, Chief Executive of Ophir Energy said:
“A comprehensive Board review in 1H 2017 identified that in a ‘lower for longer’ commodity cycle, Ophir’s competitive advantages were its material discovered resources and its healthy balance sheet. The careful use of this balance sheet to monetise our four resource plays offer a differentiated proposition of lower risk and quicker returns to Ophir’s shareholders.
The Board has prioritised this monetisation of our resource plays and since May we have streamlined the organisation, further reduced our overhead costs and concentrated our exploration activities on to a smaller number of high quality plays that can be paced in a way that matches our financial capacity.
“Our priorities in 2017 are achieving the Fortuna FLNG Project FID and realising incremental value across our operated production base. Fortuna has made significant progress in the first half of 2017 and now has one primary milestone outstanding: namely the project financing. Once this is achieved, we will seek shareholder approval and the formal decree from the President of Equatorial Guinea.”
2017 Half-year Results Summary
- Established clear priority of unlocking value from Ophir’s 1 Bnboe discovered resource base
- Implemented additional G&A cost reductions that will deliver further savings of $10-12 million per annum
- Rationalised our exploration portfolio to a reduced number of quality options in proven, world class producing basins. These include Block 5 in Mexico, which was signed during the period
Fortuna FLNG Project progressing to FID
- Signed Umbrella Agreement with the government of Equatorial Guinea
- Announced Gunvor as the nominated buyer for the LNG (post period end)
Resource monetisation across our operated production base
- Approved Bualuang Phase IV investment to monetise a further 9.2 MMbo of the field
- Commenced a 3D seismic programme at Kerendan to enable expansion of the gas field
Healthy financial position
- Revenue of $88 million, post-tax loss of $85 million (including exploration write offs of $77 million partially offset by an impairment write back of $24million), post-tax operating cash flow of $47 million
- Gross cash on balance sheet at period end of $237 million, net cash of $130 million
- Refinanced our Reserve Based Lending Facility at $250 million. This is presently undrawn at $178 million but contributes to a total liquidity (cash and undrawn debt facility) of $415 million
A presentation for analysts will be held at 9.30am this morning. This will be webcast live through the link on the Company website: www.ophir-energy.com/investors.
Press release is available to download