15 November, 2011
Ophir, the upstream African oil and gas resource company
announces 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
(Tanzania) 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 ($186.3 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
Tanzania Blocks 1, 3, 4 (Ophir 40% WI)
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 (Ophir,
Petrobras and Statoil). 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 (Block 1), 1W (Block 1) and 3A (Block 3). 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 70% WI)
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 (Ophir 80% WI)
Agreement has been reached with the EG Government regarding the
addition of adjacent acreage (the former Block C West Block) 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 (in the newly
added acreage) 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 (Ophir 50%
WI)
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.
Gabon Blocks Manga and Gnondo (Ophir 100%
WI)
In Manga an 18 month extension was agreed to the PSC which will
allow for the acquisition of a 3D seismic programme which will
allow a better understanding of potential play systems on the
flanks of the Loiret Dome. This survey is currently being planned
and, together with the small 3D survey which is planned over the
Pachg Liba prospect, will add substantially to the understanding of
the prospectivity of the two Blocks. Data will be available in mid
2012.
AGC (Ophir 36.7% WI)
The farm-out of 8.8% equity to FAR Limited (FAR) was finalised
on 17 March 2011 and a further farm-out of 30% equity to Noble
Energy Inc. (Noble) was completed during June 2011.
The Maersk Deliverer rig was taken on contract on 14 June 2011
in Ghana and following mobilisation to the AGC, Kora-1 was spudded
on 28 June 2011 in 2,600m of water. The well was drilled to a total
depth of 4,480mRT in 36 days with no LTIs and the rig was released
on 31 July 2011. The primary (Albian) and secondary (Coniacian and
Barremian) reservoir intervals were penetrated close to their
anticipated depths, but the well encountered a predominantly
claystone and thinly-bedded limestone sequence, rather than the
prognosed sandstone reservoir facies. The lack of reservoir sands
makes it difficult to assess the impact on the likelihood of a
hydrocarbon charge system in the area although the higher than
expected temperatures suggest that the hydrocarbon source kitchen
is likely to have a greater extent than previously thought.
A 12 month extension to the current PSC term has been secured in
order to carry out a full post well review and an assessment of the
well implications for both the Marin Profond Block, where further
potential has been identified in the area inboard of Kora-1, and
also the wider Senegal-Guinea Bissau portion of the MSGBC Basin
where Ophir has an option to farm-in to FAR's three Senegal
Blocks.
Madagascar (Ophir 80% WI)
The airborne gravimetry data, which had been acquired in October
2010, was processed and interpreted during the first half of 2011.
The final interpretation of the gradiometry data has clarified the
prospectivity model for the Block and this is currently being
reassessed. In parallel with this, the JV is in discussions with
the Government regarding entry into the next PSC phase.
Somaliland (Ophir 75% WI)
A technical assessment of the Berbera Block (Somaliland) 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
(PSA) and append some additional open acreage (SL9) 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.
JDZ
Ophir elected to withdraw from the JDZ PSC in March 2011
following disappointing results at Lemba-1 and a lack of follow-up
potential.
Congo (Ophir 48.5% WI)
Premier Oil, the former Operator of the Marine IX Block in Congo
(Brazzaville), notified the JV of its decision to withdraw from the
permit in October 2010. Ophir assumed the role of operator from 1
May 2011, with Premier's equity being assigned pro rata between
Ophir and Kufpec. A 12 month extension to the current PSC term has
been approved and will be used to carry out a full prospectivity
assessment of the block ahead of a decision to enter the next term,
which carries a commitment well. In particular, the potential of
the pre-salt play system will be assessed and a gravity gradiometry
survey is planned to be acquired in Q4 2011.
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.