Ophir Energy plummets 18pc as project partner exits
Jillian Ambrose
Ophir Energy's tie-up with Schlumberger has fallen apart
Shares in oil and gas
group Ophir Energy plummeted to all-time lows after its development
partner Schlumberger backed out of a key gas project.
The London-listed explorer’s stock plunged 18pc to 75p by
late morning after Ophir said its team-up with the world's
largest oilfield services group to develop the Fortuna gas project off
the coast of East Guinea had fallen apart.
But the group said it remained confident that it would move
ahead with the plans before the end of the year after reducing the costs
of the project from $600m to between $450-500m to make it economic at
current market prices of $45 a barrel.
Ophir added that it was already lining up potential project partners and financing plans.
“We have been reviewing a number of options and our
discussions continue with other quality counterparties that can offer an
attractive source of funding,” said Ophir boss Nick Cooper.
The discussions include finding a replacement for Schlumberger as an
upstream equity partner, or finding funding through vendor financing or
through pre-sales of gas.
Fortuna is an offshore, floating liquefied natural gas (LNG) platform
that will harvest and compress gas from nearby gasfields. This
compressed gas can then be carried on LNG ships and traded on the global
market.
Floating LNG projects are a relatively new, economic way to tap
offshore resources and Ophir says Fortuna will be able to produce as
much as 330 million cubic feet of natural gas per day for a period of 30
years.
Ophir will a final decision on the project by the fourth quarter of the year, in order to produce its first gas in early 2020.
Meanwhile, rival oil explorer Premier Oil saw its share
price rise more than 5.5pc to 77.6p on Friday morning after finalising
its deal to buy Eon’s North Sea gas assets.
Premier boss Tony Durrant said: “The acquired assets
have had a strong start to 2016, performing ahead of expectation, adding
immediate cash generative production of over 17,000 barrels of oil
equivalent per day and provide future opportunities to enable us to
deliver value for our shareholders.”
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