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Ophir strengthens grips in SE Asian market after integrating Santos assets

JAKARTA (RambuEnergy.com) – UK-based oil and gas company Ophir Energy Plc said it has strengthened its production and development portfolio in the South East Asian market following the successful integration of the Santos South East Asian assets.

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,” Interim CEO of Ophir Alan Booth said.

In other development, on Jan. 5, the company has yet to extend the Block R licence in Equatorial Guinea.

“We are in negotiations to rationalize 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,” he said.

“We remain mindful of the potential value of our gas assets in Tanzania, notwithstanding the uncertainty over timing for their development,” Booth said.

“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,” he noted.

In 2018, the company acquired interests in the Madura and Sampang PSCs (Indonesia) and Block 12W (Vietnam) from Santos for US$205 million.

The acquisition has materially increased production and cash flow. These assets have performed better than expected with the assets returning cash flow of approximately US $110 million in full-year 2018, representing approximately half the initial purchase
price.

Its daily production averaged 29,700 boepd, 8% ahead of guidance with Madura, Sampang and Block 12W contributing 18,000 boepd.

The company added 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.

The company has also 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 for restructuring and relocation costs.

In addition, the company has 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 Dec. 31, 2018 at US$322 million.

The expanded RBL was drawn by a further US$100 million to US$250 million on Jan. 2, 2019 to fully repay the outstanding amount of US$103 million against the US$130 million 18 months Bridge Facility. (*)

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