TIDMOPHR
RNS Number : 0724N
Ophir Energy Plc
15 January 2019
15 January 2019
Ophir Energy plc
("Ophir", the "Group" or the "Company")
Operations and Trading Update
Ophir provides the following update on its trading and
operations for the twelve month period ending 31 December 2018.
Alan Booth, Interim CEO of Ophir, commented:
"With the successful integration of the Santos South East Asian
assets, Ophir has significantly strengthened its production and
development portfolio. We are now well positioned to generate
significant free cash flow going forward. Our underlying business
and balance sheet remain robust.
"As we announced on 5 January, the Block R licence in Equatorial
Guinea has not been extended. We are in negotiations to rationalise
parts of our frontier exploration portfolio with the potential to
not only bring in cash, but also importantly reduce our future
exploration capital commitments and further improve our liquidity
position. We remain mindful of the potential value of our gas
assets in Tanzania, notwithstanding the uncertainty over timing for
their development.
"As outlined in our strategy statement on 13 September, we are
building a company with increasing cash generation, and declining
risk capital expenditure. Our future investment decisions will
continue to focus on maximising returns to shareholders."
Summary of 2018 Financials
The below table provides a summary of the estimated financial
information in this release on both a pro-forma and IFRS basis
based on the company's unaudited preliminary financial results:
Units Proforma IFRS Basis(2)
Basis(1)
FY 2018 FY 2018
(E) (E)
-------------- ---------- -------------
Production (boepd) 29,700 17,200
-------------- ---------- -------------
Acquisition cost (with effective
date of 1 January 2018)(3() ($'millions) 205 149
-------------- ---------- -------------
Capital expenditure (including
pre-licence expenditures) ($'millions) 122 117
-------------- ---------- -------------
Net debt ($'millions) 35 35
-------------- ---------- -------------
Gross liquidity (cash and
undrawn debt facility)(4() ($'millions) 390 390
-------------- ---------- -------------
1. Full year 2018 pro forma basis assuming accounting for the
Santos acquisition from the effective date of 1 January 2018.
2. Full year 2018 IFRS basis with acquisition accounting for the
transaction from the closing date of [6 September 2018], and as
will be reported in the company's consolidated 2018 financial
statements.
3. Net cash settlement in 2018 for acquisition of Madura,
Sampang and Block 12W was $149 million. The final accounting for
the acquisition will recognise the measurement of the acquisition
date fair values of the identifiable assets and liabilities. This
will likely include non-cash adjustments for deferred tax,
decommissioning, etc. as a consequence of the transaction.
4. Gross liquidity is calculated after repayment of the Bridge
Facility of $103 million on 3 January 2019
2018 Financial Highlights:
(all 2018 figures, unless otherwise stated, are on a pro-forma
basis accounting for the Santos acquisition from the effective date
of 1 January 2018)
-- Capital expenditure (including pre-licence expenditures)
estimated at $122 million, below previous guidance of $145
million.
-- Opex estimated at $12 per boe highlighting the low cost and
cash generative nature of our expanded production base.
-- Year-end net debt estimate reduced to $35 million (from $65
million previously) as a result of lower capital expenditure.
-- Cash and cash equivalents estimated at $323 million with
gross liquidity available (cash and undrawn debt facilities and
after assuming repayment of the Bridge Facility on 3 January 2019)
estimated at $390 million. The 2018 leverage ratio (gross debt/cash
flow from operations before working capital adjustments) is
estimated at 1.5 and 2018 year-end gearing ratio (gross debt
divided by gross debt plus equity) is estimated at 32%. On a net
debt basis, the leverage ratio is estimated at 0.2 and the gearing
ratio at 5%. The company's balance sheet therefore remains strong
at year-end 2018.
2018 Corporate & Operational Highlights:
-- Acquisition of interests in the Madura and Sampang PSCs
(Indonesia) and Block 12W (Vietnam) from Santos for $205 million
materially increased production and cash flow. These assets have
performed better than expected with the assets returning cash flow
of approximately $110 million in full year 2018, representing
approximately half the initial purchase price.
-- Daily production averaged 29,700 boepd, 8% ahead of guidance
with Madura, Sampang and Block 12W contributing 18,000 boepd.
-- De-risked the next phase of growth in the Sampang and Madura
PSCs through the FID of the Meliwis development and the Paus Biru
exploration success. These developments will not only bring new
fields in the licences on stream but also extend the economic life
of the existing fields.
-- Continued to makes progress towards rationalising the wider
frontier exploration portfolio. A series of commercial agreements
are under negotiation which, if successful, will reduce forecast
exploration spend significantly in 2019 as well as reduce the
future exploration commitment spend from its current level.
-- Commenced the relocation of the corporate functions from
London to Southeast Asia with the plan to complete the move by
September 2019, yielding further significant costs savings during
the coming year. The company's 2018 financial statements are likely
to include provisions of approximately $10 million forrestructuring
and relocation costs.
-- Completed refinancing and expansion of Reserve Based Lending
Facility (RBL). The RBL was increased by $100 million to $350
million with the maturity also extended by 18 months to 31 December
2025. The borrowing base amount under the RBL was closed-out with
Lenders at 31 December 2018 at $322 million. The expanded RBL was
drawn by a further $100 million to $250 million on 2 January 2019
to fully repay the outstanding amount of $103 million against the
$130 million 18 months Bridge Facility.
2019 Outlook and Guidance (assuming an average Brent price of
$61 per bbl)
-- Daily production for 2019 is forecast in line with previous guidance at 25,000 boepd.
-- The company has two oil price hedges in place for 2019: for
the period to 6 September 2019, the company sold a Brent swap at
approximately $70 per barrel and purchased a Brent call at
approximately $78 per barrel for 2,000 bpd; and for the full
calendar year 2019, the company sold a Brent swap at approximately
$56 per barrel and purchased a Brent call at approximately $66 per
barrel for 2,000 bpd.
-- Opex per bbl is expected to be $16 per boe, an increase on
the previous year due to workover drilling on the Kerendan field
and ESP replacements for three wells on the Bualuang field.
-- Capital expenditure is expected to be approximately $150
million assuming various farm-outs are closed successfully. The
majority of the spending for 2019 (approximately $110 million) is
development and production expenditure focused on growing our
production and cash flow, including both Bualuang and Madura
(Meliwis development). The balance of spend is provided for
exploration, predominantly exploration commitments as the company
manages its exit from its deep water portfolio. The company is
seeking to reduce those commitments further where possible.
-- Year end net debt is forecast at $70 million, below our previous guidance of $105 million.
-- Cash and cash equivalents, and gross liquidity, at year end
2019 are forecast at $230 million. This assumes the company reduces
its total debt exposure by 2019 year-end to $300 million giving
rise to a 2019 leverage ratio (gross debt/cash flow from operations
before working capital adjustments) of 1.5 and 2019 year-end
gearing ratio (gross debt divided by gross debt plus equity) of
30%. On a net debt basis, the leverage ratio is forecast at 0.5 and
the gearing ratio at 10%, demonstrating conservative leverage.
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 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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