Ophir Energy Issues Interim Management Statement And Updates On Africa Operations

[Siciid1986]

Ophir Energy Issues Interim Management Statement And Updates On Africa Operations

 

■Ophir Energy have Transferred Operatorship of Blocks 1, 3 and 4 to BG commenced during the first half of 2011, with BG formally assuming Operatorship from 1 July 2011.

■The dynamically positioned semisubmersible rig 'DeepSea Metro-1' has been contracted by BG on behalf of the Joint Venture and is expected to arrive in Tanzania during early December 2011.

■Ophir signed a farm-in agreement to the East Pande Block, to the west of Blocks 3 and 4, on 29 March 2011 and the handover of operatorship from RakGas to Ophir is now complete.

■In Equatorial Guinea, Agreement has been reached with the EG Government regarding the addition of adjacent acreage to Ophir's existing Block R. The new acreage contains the Estrella de Mar and Oreja de Mar discoveries and potentially large prospects.

Ophir Energy, the upstream African oil and gas resource company, has announced its Interim Management Statement in accordance with the UK Listing Authority's Disclosure and Transparency Rules. It covers the period from 31 March to 14 November 2011.

 

Highlights

 

 

■On 13 July 2011 Ophir listed on the Premium segment of the main market of the London Stock Exchange and raised $384 million.

■Formal Operatorship Transfer Agreement of Blocks 1, 3, and 4 to BG was signed on 2 June 2011, with BG taking over Operatorship from 1 July 2011.

■On 13 October 2011, the Boards of Ophir and Dominion announced that they had reached agreement on the terms of a recommended offer by Ophir to acquire Dominion valuing the entire issued and to be issued share capital of Dominion and the Dominion Convertible Notes at £118.2 million. A further update on the acquisition will be provided in the weeks ahead.

■Ophir announced on 31 October 2011 that the amendment and expansion of the Block R production sharing contract in Equatorial Guinea was signed and includes two additional gas discoveries and several new prospects.

■The Group's cash position as at 30 September 2011 was $423.63m.

 

 

Operational Update

 

 

Somaliland

 

A technical assessment of the Berbera Block was completed during the first half of 2011 and concluded that further seismic data is necessary to mature a drilling prospect. In parallel with this, negotiations continued with the Government of Somaliland to revise the terms of the Production Sharing Agreement and append some additional open acreage to the west of the existing Block. These discussions were concluded in November 2011 and an agreement to amend the PSA is currently in the process of being ratified. Once this is in place additional JV partners will be sought.

 

 

 

Tanzania Blocks 1, 3, 4

 

Transfer of Operatorship of Blocks 1, 3 and 4 to BG commenced during the first half of 2011, with BG formally assuming Operatorship from 1 July 2011. BG now also operates the Mtwara Port facility on behalf of the other participating Operators. The Mtwara facility is currently being upgraded to accommodate multiple concurrent users and it is likely that operatorship will eventually be handed to an independent third party.

 

The dynamically positioned semisubmersible rig 'DeepSea Metro-1' has been contracted by BG on behalf of the Joint Venture and is expected to arrive in Tanzania during early December 2011. The JV anticipates spudding five wells on the blocks in 2012. The associated optimum drilling sequence for the first three wells are likely to be Jodari. The newly acquired 3D data across Blocks 3 and 4 is currently being interpreted and prospects will be incorporated into the programme as they are matured.

 

An additional 3D seismic survey is being considered by the Block 1 JV to cover the outboard area. This is believed to potentially contain an extension to the successful plays which have been drilled in Mozambique by Anadarko and more recently ENI.

 

 

Tanzania E. Pande

 

Ophir signed a farm-in agreement to the East Pande Block, to the west of Blocks 3 and 4, on 29 March 2011 and the handover of operatorship from RakGas to Ophir is now complete. The existing offshore 2D data has been used as a basis for an enlarged 2,100sq km 3D programme, and the survey is likely to commence in December 2011. A number of potentially significant prospects have been identified on the existing 2D data and, assuming the new 3D matures these to drillable status, a drilling campaign is provisionally planned for Q4 2012.

 

 

Equatorial Guinea

 

Agreement has been reached with the EG Government regarding the addition of adjacent acreage to Ophir's existing Block R. The new acreage contains the Estrella de Mar and Oreja de Mar discoveries as well as a number of potentially large prospects.

 

This agreement has allowed Ophir to move forward into a second drilling programme and planning is under way for a campaign which is anticipated to commence as early as possible in H1 2012. Rig selection and the three firm plus one contingent well programme, is expected to include an appraisal/exploration well on the Fortuna discovery, an exploration well on the Tonel Prospect and a new exploration prospect along strike from the Fortuna discovery.

 

Following the drilling campaign and block extension, it is anticipated that sufficient gas volumes will have been demonstrated. The objective of the campaign is to prove up sufficient reserves to underpin the planned train two LNG development at which time an appropriate farminee will be sought.

 

 

Gabon Blocks Mbeli and Ntsina

 

In Mbeli and Ntsina, variations were agreed to the PSCs during April 2011 such that the current term will now end during 2014 allowing sufficient time to acquire process and interpret the 2,000sq km of 3D seismic data which forms part of the new commitment work programme. In parallel with this, the Petrobras farm-in was executed on 16 June 2011 and they are now 50% stakeholders in the PSCs. An LOI has been issued for the 3D seismic acquisition and this is expected to commence during January 2012. The survey will specifically target the pre-salt play and is designed to mature one or more of the potentially large structures which have been identified on the current data; including the Padouck Deep structure, which has a mean resource estimate of 1,236mmbbls.

 

 

Corporate and financial update

 

On 13 July 2011 Ophir listed on the Premium segment of the main market of the London Stock Exchange and raised $384 million.

 

The Group's cash position as at 30 September 2011 was $423.63m.

 

Outlook

 

The Group is now facing the most active period in its history, with a nine to thirteen well programme over the next twelve months. The drilling programme will span a mix of proven and frontier plays, targeting ca. 2.4Bboe of net unrisked resources. The campaign commences imminently in December 2011 with the drilling of the first of five wells in Tanzania. Ophir has a presence in four of the five key emerging sub-Sahara plays and the Group is well funded for its future plans.

[Jacaylbaro]

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