Ophir Energy Plc Operational Update (6052J)
13 September 2016 - 8:00AM
UK Regulatory
TIDMOPHR
RNS Number : 6052J
Ophir Energy Plc
13 September 2016
13 September 2016
Ophir Energy plc
("Ophir")
Resource Monetisation Update
Ophir provides the following update on resource monetisation at
the Kerendan and Bualuang fields.
Kerendan First Production
Commercial production has commenced from the Kerendan field,
Indonesia, in line with the schedule Ophir announced on acquiring
the asset in March 2015. Production started at 3-5 MMscfd to enable
PLN, the Indonesian state electricity distributor, to commission
the power plant and transmission system. Post commissioning, sales
will be initially maintained at a restricted volume of 5 MMscfd at
the request of PLN to enable them to meet demand for power in
immediate Buntok region. The first 160 km section of the
transmission line from the power plant to Buntok is complete and
the full 290 km transmission line to Tanjung is expected to be
completed later this year. Once the Tanjung line is completed,
production is expected to increase to 20 MMscfd, in line with the
Daily Contract Quantity.
Under the existing GSA the contractual start date for production
was 11 January 2016 and therefore a take or pay provision has been
active since this date. Ophir expects to receive settlement for the
take or pay shortfall in 1Q 2017, after the completion of a full
contract year. The annual contract quantity is 7.3Bcf and the take
or pay settlement will equate to 80% of the volumes that have not
been drawn. The total contracted volume for this first phase of
production at Kerendan is 122 Bcf. Ophir has rights to an
additional uncontracted 2C contingent resource at Kerendan of 320
Bcf (458Bcf gross).
Further discussions regarding an upward adjustment to the
contracted gas price are at an advanced stage and are also expected
to conclude before the end of this year. The current contracted gas
price is $4.79 per MMBtu escalating at 3% per annum.
Ophir holds a 70% operating interest in the Kerendan field,
Bangkanai PSC and PT Saka Bangkanai Kalimantan holds a 30% equity
interest.
Bualuang Water Debottlenecking Project Completed
Production was restarted on 2 September, after a 10 day
shutdown, at the Bualuang field in the Gulf of Thailand on
completion of the final tie-in work of a water debottlenecking
project. This was a highly complex brownfield project as work to
upgrade the facilities was conducted over the last 5 months whilst
minimising production downtime. Over 100,000 man-hours of work were
conducted offshore by our local contractor Unithai, with the
maximum POB of over 200 people supported by the accommodation barge
"Posh Bawean" from 23(rd) July to 31(st) August.
The sub-surface part of the project was completed at the end of
2015 with the drilling of a new water disposal well and the
workover of the existing water disposal wells. This was followed in
2016 with a two phase project to upgrade the surface facilities.
The combined project has resulted in increasing the design capacity
of the water handling and disposal system from 50,000 bwpd to
75,000 bwpd. Both the drilling and facilities engineering aspects
of the project were completed without major incident, recording
zero lost-time incidents.
Production is in the process of ramping up as the new system is
brought on-stream and tested, but as of 11th September the field
was producing at an instantaneous rate of 9,700 bopd at a water
disposal rate of 64,000 bwpd, an increase of 1,400 bopd compared to
production in late August before commissioning of the new
facilities. Capital expenditure to deliver the project was $20
million and it is expected to increase NPV of Bualuang by $80
million and payback within 12-18 months.
Bill Higgs, Chief Operating Officer, commented:
"We are pleased to have successfully and safely completed
commissioning and to have first commercial gas production at the
Kerendan field. The field will now provide another source of cash
flow for Ophir and is the first commercial production of
hydrocarbons from Central Kalimantan.
Furthermore, increasing water handling at Bualuang has added
materially to the cash generation of the asset. The team did an
excellent job in safely completing a technically challenging
project while minimising the impact to production.
Both Bualuang and Kerendan have the potential to monetise
incremental resource and realise further NAV per share growth for
our shareholders."
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
Wendel Verbeek
This information is provided by RNS
The company news service from the London Stock Exchange
END
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