TIDMOPHR
RNS Number : 8333W
Ophir Energy Plc
03 August 2018
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, IN, INTO OR FROM ANY RESTRICTED JURISDICTIONS OR ANY OTHER
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION.
3 August 2018
Ophir Energy plc ("Ophir")
Proposed acquisition of certain Southeast Asian producing and
exploration assets from Santos Limited
Publication of Circular and Notice of General Meeting
Further to the announcement by Ophir on 3 May 2018 relating to
the proposed acquisition of a package of Southeast Asian assets
from Santos Limited, an Australian listed Oil & Gas company,
for an aggregate cash consideration of $205 million pre-working
capital adjustments, subject to certain approvals (the
"Transaction"), Ophir announces that the UK Listing Authority has
today approved a class 1 circular in relation to the Transaction
(the "Circular").
The Chairman's Letter within the Circular contains the following
information on the Background to and reasons for the
Transaction:
"Over recent years, against a challenging backdrop for the
sector, Ophir has taken a number of steps to deliver against its
strategy including:
-- increasing the focus on Ophir's cash generative production
and development assets and maximising and expanding the cash flows
from that portfolio;
-- refocusing exploration into a smaller number of lower-risk
near-field opportunities that tie back to existing infrastructure,
where Ophir is most confident of being able to monetise discoveries
in a shorter time frame (e.g. infield opportunities in the Bualuang
field, Thailand and the Kerendan field, Indonesia), alongside the
selective acquisition of new acreage in particularly attractive
areas (e.g. underexplored world-class petroleum systems, offshore
Mexico);
-- pursuing opportunities to monetise contingent resources
through asset development, farm-out or divestment;
-- undertaking a significant cost reduction programme, including
reductions to the London head office organisation and executive
teams; and
-- deploying capital and manpower in a disciplined manner where
Ophir sees the greatest risk-adjusted opportunity for returns.
The Board believes that the Transaction represents an attractive
next step in this strategy, adding a portfolio of high quality
production and development assets that will further enhance the
cash flow characteristics of the Group. Furthermore, the Board
believes that the Transaction offers a number of opportunities to
create significant value for Shareholders including:
-- through the addition of a balanced and complementary
portfolio of low cost, highly cash generative Producing Assets in
Southeast Asia, a region where Ophir already has producing
assets;
-- through increased scale and stability of cashflows. The
Transaction is forecast to increase the Group's 2P reserves by over
40% from 49.4 MMboe to 70.4 MMboe. Forecast production and funds
flow for the Enlarged Group for the year ending 31 December 2018 on
a full year pro forma basis (assuming the acquisition was effective
from 1 January 2018) will increase to c.25,000 boepd (including
c.13,500 boepd from the Producing Assets) and US$190 million,
respectively;
-- through significant near-term development opportunities (e.g.
the Meliwis gas field development in Indonesia), alongside
production life extensions utilising strategic infrastructure
positions;
-- through economies of scale in operating expenditures, general
and administration expenses and greater financing efficiencies. The
Board expects the Enlarged Group to benefit from material cost
synergies arising as a result of the Transaction, principally
through the combination of the Group's existing Indonesian assets
with the Indonesian assets being acquired from Santos. In
aggregate, synergies are estimated to be at least US$13 million per
annum (pre-costs of realising the synergies); and
-- through the deployment of its significant technical expertise
and wide ranging regional experience, adding value to the assets
via delivering on upside potential where the Group will be
operator, or working with project partners where it will not be the
operator to drive value creation."
As part of the financing for the Transaction Ophir has signed an
acquisition bridge facility of up to $130 million which it expects
to refinance into its existing Reserve Based Lending facility in
due course. Further details can be found in Part VI of the
Circular.
Ophir shareholders (other than those who have elected for
notification by website) will shortly receive, amongst other
documents, a copy of the Circular which contains a notice of the
General Meeting at which Ophir shareholders will be asked to vote
on the resolutions required to approve the Transaction. As set out
in the Circular, the General Meeting will be held on Monday 20
August 2018 at 12:00 p.m. at the offices of Linklaters LLP at One
Silk Street, London, EC2Y 8HQ. The resolutions will require
approval by a simple majority of the Ophir shareholders present and
voting (in person or by proxy) at the General Meeting.
Completion of the Transaction is conditional upon approval of
the Transaction by Ophir shareholders at the General Meeting.
Completion in respect of the Exploration Assets is also conditional
upon, amongst other things, regulatory and certain partner
consents, and their respective pre-emption regimes.
The timetable of principal events in relation to the Transaction
is as set out below. If any of the key dates set out in the
expected timetable change, an announcement will be made via a
Regulatory Information Service.
Publication of the Circular and Notice of Friday 3 August
General Meeting 2018
Latest time and date for receipt of Forms
of Proxy or electronic proxy appointments 12:00 p.m. on
or completion and transmission of CREST proxy Thursday 16 August
instructions 2018
12:00 p.m. on
Monday 20 August
General Meeting 2018
Expected date of Completion in respect of Friday 7 September
the Producing Assets 2018
Expected date of Completion in respect of First half of
the Exploration Assets 2019
Copies of the Circular are available for inspection on Ophir's
website at http://www.ophir-energy.com/ or can be inspected at the
offices of Ophir, Level Four, 123 Victoria Street, London SW1E 6DE
and the offices of Linklaters LLP, One Silk Street, London, EC2Y
8HQ during normal business hours on any weekday (excluding
Saturdays, Sundays and public holidays) from the date of this
announcement until the conclusion of the General Meeting and also
at the place of the General Meeting from 9.00 a.m. on the day of
the General Meeting until the conclusion thereof. Copies of the
Circular will also be submitted to the National Storage Mechanism,
where they will be available for inspection at
www.morningstar.co.uk/uk/NSM.
Capitalised terms not otherwise defined in this announcement
shall have the meaning given to them in the Circular.
Enquiries:
Ophir
Geoff Callow, Head of IR and Corporate Communications +44 (0)20 7811 2400
Brunswick (PR Adviser to Ophir)
Patrick Handley
Wendel Verbeek +44 (0)20 7404 5959
Barclays - Lead Financial Advisor
Will O'Malley + 44 (0)20 7623
Tom Macdonald 2323
Merrill Lynch International - Joint Financial
Advisor
Julian Mylchreest + 44 (0)20 7628
Tony White 1000
Important Notice
This announcement is for information purposes only is not
intended to and does not constitute a circular or form part of any
offer or invitation to sell or issue, or any solicitation of any
offer to purchase or subscribe for, any shares or any other
securities, nor shall it (or any part of it), or the fact of its
distribution, form the basis of, or be relied on in connection
with, any contract therefor.
Merrill Lynch International, a subsidiary of Bank of America
Corporation, is acting exclusively for Ophir in connection with the
acquisition and for no one else and will not be responsible to
anyone other than Ophir for providing the protections afforded to
its clients or for providing advice in relation to the
acquisition.
Barclays Bank PLC, acting through its Investment Bank, which is
authorised by the Prudential Regulation Authority and regulated in
the United Kingdom by the Financial Conduct Authority and the
Prudential Regulation Authority, is acting exclusively for Ophir
and no one else in connection with the Transaction and will not be
responsible to anyone other than Ophir for providing the
protections afforded to clients of Barclays nor for providing
advice in relation to the Ophir or any other matter referred to in
this announcement.
This announcement includes forward-looking statements. These
forward-looking statements involve known and unknown risks and
uncertainties, many of which are beyond Ophir's control and all of
which are based on the Directors' current beliefs and expectations
about future events. Forward-looking statements are sometimes
identified by the use of forward-looking terminology such as
"believe", "expects", "may", "will", "could", "should", "shall",
"risk", "intends", "estimates", "aims", "plans", "predicts",
"continues", "assumes", "positioned" or "anticipates" or the
negative thereof, other variations thereon or comparable
terminology. These forward-looking statements include all matters
that are not historical facts. They appear in a number of places
throughout this announcement and include statements regarding the
intentions, beliefs or current expectations of the Directors or
Ophir concerning, amongst other things, the results of operations,
financial condition, liquidity, prospects, growth, strategies and
distribution policy of Ophir and the industry in which it
operates.
These forward-looking statements and other statements contained
in this announcement regarding matters that are not historical
facts involve predictions. No assurance can be given that such
future results will be achieved; actual events or results may
differ materially as a result of risks and uncertainties facing
Ophir. Such risks and uncertainties could cause actual results to
vary materially from the future results indicated, expressed or
implied in such forward-looking statements. Such forward-looking
statements contained in this announcement speak only as of the date
of this announcement. Ophir expressly disclaims any obligation or
undertaking to update the forward-looking statements contained in
this announcement to reflect any change in their expectations or
any change in events, conditions or circumstances on which such
statements are based unless required to do so by applicable law,
the Prospectus Rules, the Listing Rules or the Disclosure Guidance
and Transparency Rules of the FCA or the Market Abuse
Regulation.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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