TIDMOPHR
RNS Number : 9459B
Ophir Energy Plc
16 January 2018
16 January 2018
Ophir Energy plc
("Ophir")
Trading Update
Ophir provides a trading update for the year ended 31 December
2017 ahead of the publication of audited financial results on 7
March 2018:
Nick Cooper, Chief Executive of Ophir, said:
"Ophir has reached financial stability. We ended 2017 in a
strong financial position with increased gross liquidity and
considerable discretionary capital available for investment. A
proportion of this is earmarked for the Fortuna project but we
still retain capacity to invest elsewhere in our portfolio to
generate significant cash flow growth.
"Our core Asia business is delivering solid, profitable growth.
Our 1bn boe of discovered resources offer asymmetric upside and our
under-levered balance sheet provides the means to deliver."
2017 Performance (numbers are estimates and remain subject to
the year-end audit)
-- Daily production from the Bualuang and Kerendan field was
broadly in line with the guidance provided in mid-2017 and averaged
11,700 boepd (guidance: 12,000 boepd).
-- Net cash from production (before working capital adjustments)
was in line with guidance at $89 million (guidance: $85 million).
On a unit basis this equated to $21 per boe.
-- Opex was $12 per boe reflecting the low breakeven
characteristic of our Asian production base.
-- Capital and investment expenditure (before working capital
adjustments) was below guidance at $104 million (guidance: $160
million). This was predominantly due to the deferral of the start
of investment into the Fortuna FLNG project to 2018.
-- Capital expenditure was allocated as follows: production and
development 47%, pre-development 15% and exploration and appraisal
38%. The majority of the pre-development was in respect of Fortuna.
The majority of the production and development spend was comprised
of spending on Bualuang infill drilling and Phase IV ($31 million)
and Kerendan 3D seismic programme ($13 million).
-- Total liquidity at year-end was $427 million, some $67
million higher than the previous year:
o The Group completed a refinancing of its reserve based lending
facility during 2017. Following the year-end redetermination $204
million is currently available under the facility and remains
undrawn.
o Gross debt at year-end therefore solely comprised the $107
million Nordic bond.
o The Group closed the year with net cash of $117 million
o The full year 2017 liquidity ratio (gross debt: EBITDAX) was
1.0 with year-end gearing of 7% (gross debt / gross debt +
equity).
2018 Guidance/Outlook (numbers are forward looking
estimates)
-- Average daily production is expected to be level in 2018 at
approximately 11,500 boepd with all of the production assets
expected to produce at similar rates to that in 2017. The estimate
takes into account the continuing unpredictability of offtake
nominations from Sinphuhorm.
-- In late 2017, the Group hedged approximately 27% of its 2018
production. The Group purchased, with a zero cost structure, a
Brent swap at an average $59.68/bbl and a call at an average price
of $68.08/bbl, both for 3,200 bpd.
-- Underlying cash flow from production (including Sinphuhorm
and before working capital adjustments) is forecast to be
approximately $90 million at an average Brent oil price of $57 per
bbl. On a unit basis this equates to $21 per boe.
-- Opex per barrel expected to be $14 per boe, marginally up on
2017 due to planned workover wells on the Bualuang field and some
maintenance work at the Kerendan field.
-- Capital expenditure (before working capital adjustments) is
expected to be approximately $150 million. Around 70% of this is
expected to be spent on production and development with major areas
of expenditure being Bualuang Phase IV ($30 million) and Fortuna
($65 million).
-- Gross liquidity is currently forecast at $320 million:
o The Group expects to end 2018 with a marginally positive net
cash position.
o The Group is currently considering options to refinance its
outstanding $107m Nordic bond. A decision on the refinance will
likely be taken following FID of Fortuna.
o The full year 2018 liquidly ratio (gross debt:EBITDAX) is
forecast at 1.5 with year-end 2018 gearing forecast to marginally
increase to 9% (gross debt / gross debt + equity).
-- Ophir is in discussions to farm-out certain exploration
assets ahead of further exploration drilling, in line with our
strategy of having our exploration portfolio self-fund to the
extent possible.
-- Funding discussions regarding the Fortuna FLNG project are continuing.
Reconciliation of 2017 estimate versus guidance (numbers are
estimates and remain subject to the year-end audit)
Previous Fortuna Accrual Other Revised
Guidance Investment Reversal Adjustments Estimate
$'MM $'MM $'MM $'MM $'MM
Cash flow from production
(before working capital) 85 - - 4 89
Administration costs (10) - - (1) (11)
Capital expenditure (before
working capital) (160) 38 21* (3) (104)
Net finance costs (19) - - 6 (13)
Working capital and other
adjustments 29 - (21)* (12) (4)
Net cash movement (75) 38 - (6) (43)
Net cash C/forward 85 38 - (6) 117
Debt and undrawn available
debt 305 - - 5 310
Gross liquidity 390 38 - (1) 427
========== ============ ========== ============= ==========
*This is a non-cash item and reflects the release of an accrual
that was previously carried for a contingent tax exposure
For further enquiries please contact:
Ophir Energy plc + 44 (0) 20 7811 2400
Geoff Callow, Head of IR and Corporate Communications
Brunswick (PR Adviser to Ophir) +44 (0)20 7404 5959
Patrick Handley
Wendel Verbeek
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 (LEI: 213800LAZOZTKPAV258).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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