Ophir Energy Plc Trading and Operational Update (8054O)
10 November 2016 - 8:00AM
UK Regulatory
TIDMOPHR
RNS Number : 8054O
Ophir Energy Plc
10 November 2016
10 November 2016
Ophir and OneLNG to form a
Joint Operating Company to develop Fortuna FLNG Project
Ophir Holdings & Ventures LTD ("Ophir"), a wholly owned
subsidiary of Ophir Energy plc, and OneLNG(SM) , a joint venture
between subsidiaries of Golar LNG Limited and Schlumberger,
announce that they have signed a binding Shareholders' Agreement to
establish a Joint Operating Company ("JOC") to develop the Fortuna
project, in Block R, offshore Equatorial Guinea utilising Golar's
FLNG technology.
OneLNG and Ophir will have 66.2% and 33.8% ownership of the JOC
respectively (with economic entitlements materially consistent with
the equity interest in the JOC(1) ). The JOC will facilitate the
financing, construction, development and operation of the
integrated Fortuna project and, from Final Investment Decision
("FID"), will own Ophir's share of the Block R licence and the
Gandria FLNG vessel. This innovative structure aligns investment
across the value chain and provides a framework to promptly deliver
a fully financed project.
The Shareholders' Agreement and FID are subject to, amongst
other things:
-- agreement of final terms and execution of documentation for the project debt financing
-- approval by the shareholders of Ophir Energy plc
-- approval by the government of Equatorial Guinea
FID is now expected to take place in 1H 2017 with first gas
anticipated in 1H 2020. Initial offtake is expected to be 2.2-2.5
mtpa for a duration of between 15 and 20 years which will monetise
around 2.6 Tcf of the discovered resource.
The expected total capital expenditure for the integrated
project is approximately $2 billion to reach first gas.
Approximately $1.2 billion is expected to be debt financed, with
full drawdown by the start of commercial operations. Prior to FID,
a decision will be taken as to the final offtake pricing mechanism.
Shortlisted proposals from potential offtakers will be evaluated on
the basis of value maximisation. At an assumed FOB gas price of
$6/mmbtu the JOC will generate approximately $560 million in cash
flow (pre debt service) per annum.
Nick Cooper, Chief Executive of Ophir, commented: "Formation of
the Fortuna JOC provides the framework for FID and clear line of
sight to first gas. This progress is due to the innovative
partnering between OneLNG and Ophir, the quality of the resource
base, the excellent project economics and support from the
Government of Equatorial Guinea.
"Ophir's committed future expenditure to first gas will not
exceed $150 million and certain other commercial exposures have
been limited. We will now be able to advance the project while
preserving our balance sheet strength."
Jeff Goodrich, CEO of OneLNG commented: "OneLNG was formed to
provide an integrated approach to operators to reduce risk and
costs and accelerate the time to monetize stranded gas reserves,
and thereby transforming the economic viability of such projects.
We are pleased to sign a shareholders' agreement with Ophir for the
formation of the Fortuna JOC. We look forward to working with Ophir
and all of the other stakeholders to deliver OneLNG's and Africa's
first deep-water FLNG project."
1 - Except in a higher price environment.
Ophir management will host a call for analysts and investors at
8.30am this morning. See below for details:
Participant Dial In: +44 (0)1452 555 566
PIN: 18084763
A replay of the call will be available from later this morning
on:
Replay: +44 01452 550000
Code: 18084763
This announcement contains inside information.
For further enquiries please contact:
Ophir Energy plc + 44 (0) 20 7811 2400
Nick Cooper, CEO
Bill Higgs, COO
Tony Rouse, CFO
Geoff Callow, Head of IR and Corporate Communications
OneLNG +44 (0)20 7063 7900
Stuart Buchanan, Head of Investor Relations
Brunswick (PR Adviser to Ophir) +44 (0)20 7404 5959
Patrick Handley
Wendel Verbeek
About OneLNG:
OneLNG is joint venture between Golar LNG Limited and
Schlumberger to rapidly develop low cost gas reserves to LNG. The
combination of Schlumberger reservoir knowledge, wellbore
technologies and production management capabilities, with Golar's
low cost FLNG solution offers gas resource owners a faster and
lower cost development solution that increases the net present
value of their asset.
About Ophir:
Ophir Energy is an independent Upstream oil and gas exploration
and production company focused on Africa and Asia. It is listed on
the London Stock Exchange.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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