TIDMOPHR
RNS Number : 1561M
Ophir Energy Plc
05 May 2015
5 May 2015
Ophir Energy plc
Appointment of Golar LNG as Midstream Partner for Fortuna FLNG
Project in Equatorial Guinea
Ophir Energy plc ("Ophir" or "the Company") announces it has
signed a binding heads of terms for a midstream chartering and
operating services agreement with Golar LNG ("Golar") with the
agreement of GEPetrol, its partner in Block R in Equatorial Guinea,
who will formally ratify it next week. This agreement establishes
the key commercial terms for Golar to build, operate and maintain
the floating liquefaction and storage vessel and facilities at
Ophir's operated Fortuna floating liquefied natural gas (FLNG)
project in Block R, Equatorial Guinea. The vessel to be used will
be Golar's Gimi FLNG vessel.
Nick Cooper, Chief Executive of Ophir Energy, commented:
"Finalising our midstream partner is a significant step forward
for the Fortuna FLNG project. This agreement accelerates the date
of first gas and reduces costs in a critical part of the value
chain. We believe the terms of the agreement allow the project to
deliver LNG at attractive returns into both Pacific Basin and
Atlantic Basin LNG customers. The agreement completes the value
chain economics and allows Ophir to confidently plan for first gas,
and c. 67,000 boepd of production by mid-2019.
At a time when many other greenfield LNG projects are
decelerating, Ophir has elected to accelerate the Fortuna FLNG
Project to secure what we believe will be a better market
opportunity at first gas, and to lock in anticipated reductions in
upstream development costs. We will now move immediately into the
define phase of the upstream and midstream projects with a view to
reaching Final Investment Decision ("FID") by mid-2016.
We are pleased to have secured Golar as a partner; the firm is a
leading provider of FLNG solutions and the flexible, competitive
commercial terms we have agreed will ensure that FID can be taken
at current LNG prices. Ophir sees many parallels with the emergence
of leased FPSOs approximately 25 years ago for oil developments.
The re-fitting of vessels and leasing them to independent E&P
companies in an oil field context both unlocked a series of oil
assets and also provided competitive advantage to those early
adopters of the technology. Ophir believes that the same is now
about to happen in a gas field context for FLNG."
Golar will operate the Gimi under a twenty-year charter term.
During this period it will be responsible for the sub-sea well
control, receiving, liquefying and offloading the gas to LNG
vessels. Ophir, as the operator of the Upstream component of the
project, will lease the Gimi. Ophir's responsibility will be to
construct and build the sub-sea facilities, drill the development
wells, manage the performance of the reservoirs and, together with
the Ministry of Energy and Sonagas, to market the gas on behalf of
all upstream parties.
Golar, with its partners Keppel Shipyard ("Keppel") and Black
and Veatch have previously committed to the Gimi FLNG conversion in
December 2014. Keppel is a global leader in the conversion of
floating production, storage, and offloading vessels and floating
storage and re-gasification units. Keppel, which has a track record
of close to 120 conversions, already working with Golar to convert
a similar LNG vessel for use offshore Cameroon. Black and Veatch is
a leading provider of proprietary liquefaction technology.
The Gimi is expected to have an annual average capacity of 2.2
mtpa at a reservoir production rate of up to 400,000 mscfd (c.
67,000boepd) with first gas expected mid-2019. Ophir and Golar have
agreed a vessel charter rate that is competitive with US
liquefaction tolls and that ensures that the Fortuna LNG project is
delivered at the low end of the cost curve for LNG projects.
The Fortuna FLNG project will now move into the full definition
phase and Ophir has recently appointed Worley Parsons as Owners
Engineer to the project. The midstream Front End Engineering and
Design ("FEED") is expected to be completed by end-2015 and the
upstream FEED is expected to be completed in Q2 2016. The project
is planned to reach FID by mid-2016, at which point Ophir, Golar
and GEPetrol intend to have signed a fully termed charter agreement
based upon these heads of terms.
The flow rate established by the Fortuna drill stem test ("DST")
conducted in late 2014 has resulted in a reduction in the estimated
number of development wells required for first production from
seven to three. As such, upstream capital expenditure to first gas
is currently forecast to have been reduced by $200 million to
around $800 million. Further savings are expected to be identified
as the project moves through FEED. In keeping with its strategy of
self-funding its development projects through selling down equity
in the asset, Ophir will now turn its attention to bringing an
upstream partner into the project, as well as reviewing options for
incorporating the Fortuna LNG project into the Group's debt
structure.
The previous agreement between Ophir and Excelerate Energy has
been terminated by mutual agreement.
Societe Generale acted as Ophir's financial adviser.
Golar's CEO Gary Smith commented:
"Golar is delighted to have secured a contract for our second
GoFLNG vessel. This commitment with Ophir and GEPetrol to employ a
GoFLNG vessel in Equatorial Guinea represents a further step in the
implementation of Golar's strategy to become the industry's leading
integrated midstream LNG services provider, supporting resource
owners, gas producers and gas consumers. Our new approach to
developing LNG projects is stimulating significant interest today.
Accordingly, Golar has now, based on its framework agreement with
Keppel, commenced negotiations for the company's third GoFLNG
vessel."
Ends
For Further Enquiries please contact:
Ophir Energy plc +44 (0)20 7811 2400
Nick Cooper, CEO
Bill Higgs, COO
Geoff Callow, Head of IR
Brunswick Group +44 (0)20 7404 5959
Patrick Handley
Carolina Desmeules
Notes to Editors
About Ophir
Ophir Energy (OPHR.LN) is an upstream oil and gas exploration
company which is listed on the London Stock Exchange (FTSE 250).
Ophir has a large portfolio of assets across Africa and Asia.
The Group's headquarters are located in London (England), with
operational offices in Perth (Australia), Dar es Salaam and Mtwara
(Tanzania), Malabo (Equatorial Guinea), Libreville (Gabon), Nairobi
(Kenya), Bangkok (Thailand), Jakarta (Indonesia), Kuala Lumpur
(Malaysia), Yangon (Myanmar) and Singapore.
For further information on Ophir, please refer to
www.ophir-energy.com
About Golar
Golar is one of the world's largest independent owners and
operators of LNG carriers with over 40 years of industry
experience. Golar's innovation delivered the world's first Floating
Storage and Regasification Units (FSRU) based on the conversion of
existing LNG carriers. Golar's latest strategic move is to extend
its business model further upstream by deploying its floating
liquefaction technology (GoFLNG). The objective is to become the
industry's leading integrated midstream LNG services provider,
supporting resource owners, gas producers and gas consumers.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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