Ophir Energy Plc Award of competitive FEED for Fortuna FLNG project (5518S)
09 Juli 2015 - 8:00AM
UK Regulatory
TIDMOPHR
RNS Number : 5518S
Ophir Energy Plc
09 July 2015
9 July 2015
Ophir Energy plc
Award of competitive FEED for Fortuna FLNG project
Ophir Energy announces that it has awarded Upstream Front End
Engineering and Design (FEED) contracts for the Fortuna FLNG
Project in Block R, Equatorial Guinea to two contractor consortia,
(i) McDermott Marine Construction Ltd and GE Oil & Gas UK Ltd
and (ii) Subsea 7 and Aker Solutions.
The Upstream FEED will be a competitive process with the scope
of work including subsea development design that will enable the
two competing FEED consortia to submit their EPCIC (Engineer,
Procure, Construct, Install & Commission) tenders at the end of
FEED, from which one will be selected for FID.
Key focus areas for the FEED process will be defining the number
of wells required at first gas, the cost of the development and the
delivery time of the long lead subsea items, such as subsea trees,
that are on the critical path to first gas.
The FEED process will be completed at the end of 1Q 2016, which
will allow a Final Investment Decision to be made in mid-2016 with
first gas expected in mid-2019.
As announced in May, the midstream partner, Golar LNG, will
build, own and operate the FLNG vessel, the Gimi, in return for a
tariff. Golar will conduct a separate FEED study for the midstream
element of the project, which will commence shortly. The Gimi is
forecast to have a capacity of c.2.2 MTPA. With this throughput,
and the installation of late-in-life compression facilities, the
resources discovered in Block R to date are more than sufficient to
deliver a production plateau of c.330 mmscfd (55kboepd) for over 30
years. Analysis of the drill stem test conducted on the Fortuna 2
well in late 2014 demonstrated that the well contacted over 800 Bcf
of gas in the Fortuna field, highlighting the world class nature of
the reservoir. As such, the first phase of the Fortuna FLNG project
is economically under pinned by the 1.6 Tcf of contingent resource
in the Fortuna and Viscata gas fields.
With an incremental 1 Tcf of 2C resources discovered and
immediately available to be developed, and a further 900 Bcf of low
risked prospective resource, Ophir is considering contracting a
second FLNG vessel to develop these unallocated resources. A second
vessel would both monetise currently unallocated resources and
accelerate cash flows from Block R, thereby adding material value
to the Block R FLNG programme. An investment decision for the
second vessel is currently expected to be made once the Fortuna
field has commenced production, with a view to it being operational
by the middle of the next decade.
Commenting on the award, Nick Cooper, Chief Executive Officer of
Ophir, said:
"The award of Upstream FEED is an important milestone as we
continue to de-risk the Fortuna FLNG Project through the 'Define'
phase. The FEED awards, to industry-leading contractors, follow a
strongly contested first phase, reflecting the industry's grasp of
the significance, and advanced prospects, of the Fortuna
project.
"With the appointment of Golar as midstream partner, and the
commencement of FEED, the project has strong momentum. Ophir's
focus will now switch to securing buyers for the LNG offtake and to
bringing in an equity partner prior to our mid 2016 FID. Numerous
potential counterparties have recently expressed interest in the
offtake and partnering opportunities.
"The selection of FLNG to monetise our Block R resource base has
drastically reduced gross development capex to first gas from the
c.$3bn estimates for a conventional LNG plant to c.$800mm for FLNG,
and has also reduced development lead time; thereby accelerating
first gas by 2-3 years to 2019. These improvements significantly
enhance the Project's upstream IRR.
"The potential application of a second leased FLNG vessel in
Block R is an exciting advance. This would accelerate the
production of contracted resource and expand the total resources
base to be commercialised. A second vessel would be synchronised
with the cash flow from the initial trains, thereby minimising
capex exposure to Ophir and materially increasing the Fortuna FLNG
Project's overall value."
Ends
For Further Enquiries please contact:
Ophir Energy plc +44 (0)20 7811 2400
Nick Cooper, Chief Executive Officer
Bill Higgs, Chief Operating Officer
Geoff Callow, Head of Investor Relations
Brunswick Group +44 (0)20 7404 5959
Patrick Handley
Carolina Desmeules
This information is provided by RNS
The company news service from the London Stock Exchange
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