Ophir Energy Plc Signed Heads of Agreements for Fortuna FLNG (4135I)
09 Dezember 2015 - 8:00AM
UK Regulatory
TIDMOPHR
RNS Number : 4135I
Ophir Energy Plc
09 December 2015
9 December 2015
Ophir Energy plc
("Ophir")
Heads of Agreements signed for sale of gas and Capex reductions
for Fortuna FLNG
Ophir Energy announces that it has signed Heads of Agreements
("HoAs") for LNG offtake from the Fortuna FLNG project with six
counterparties, all of whom are established LNG buyers in European
and Asian markets.
Furthermore, the Management estimate of the gross capital
expenditure required to first gas has been revised downwards from
$800 million to $600 million (i.e. from $640 million to $480
million net to Ophir's 80% working interest) based on recent input
from the ongoing upstream FEED work.
Ophir is selling 2.2 MTPA of LNG offtake, however the total
demand requested under the HoAs has seen the offtake sold several
times over. The HoAs are based on a variety of different pricing
constructs with formulae that consist of either European gas market
netbacks, oil indexation or a combination of both and that in some
cases include the provision of a floor price. Offtake under several
of the HoAs also incorporates a sharing of incremental diversion
income earned above the base contract formula for LNG volumes that
are subsequently sold into higher value markets.
As well as pricing structure, Ophir has secured additional
elements to its LNG offtake HoAs that are significant for the
development of the project. These include the offer to pre-pay for
LNG volumes in substantial quantities over the early years of the
contract. The funds received from pre-payments could cover 30%-50%
of Ophir's total net cost to first gas and could therefore be a
major contributor towards funding of the project.
The Upstream FEED process is presently c. 50% complete and as a
result Management is able to refine and reduce the remaining
upstream cost to first gas. The project has been able to capitalise
on the deflationary cost environment and has been redesigned to
increase standardisation of components wherever possible.
Accordingly the current Management estimate for gross cost to first
gas has reduced c. 25% from previous guidance to c. $600 million
($480 million net).
Separately, Ophir has contracted Fugro to perform geotechnical,
environmental and metocean surveys for the Fortuna project. The
Fugro Searcher, Fugro Scout, and Fugro Frontier vessels have been
deployed for this work, which is scheduled for completion in
January 2016.
Commenting on the signings and cost reductions, Nick Cooper,
Chief Executive of Ophir, said:
"The Fortuna FLNG project continues to move forward on schedule
with the now formal signing of all the HoAs for gas offtake with a
core group of LNG buyers. Each offtaker's proposal offers something
different, thereby providing Ophir with a range of pricing formulae
and differing commodity risk profiles which will be helpful when we
narrow down the short list in Q1 2016.
"We are also pleased to report that the estimated cost to first
gas has been reduced by a further 25% during FEED. This cost
reduction, plus the offered LNG pre-payment mechanisms materially
reduce the amount required to fund Ophir's portion of the project
ahead of the Final Investment Decision in mid-2016."
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
END
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