London-based oil and gas exploration company, Ophir Energy, has posted a net loss for the 2015, and prepared for a challenging 2016 with reduction in capital expenditure.
The company on Thursday reported a loss after taxation for the year of $322.5 million, compared to a profit of $54.8 million in 2014.
Pre-tax operating loss for 2015 is reported as $376 million, versus a profit of $288.5 million the year-before.
Revenue for 2015 amounted to $161.1 million or $211.1 million on a full year pro forma basis, versus nil revenues in 2014. The realised price for oil and liquids is $56.32/bbl including $17.1 million of commodity price hedges.
Following the 34% reduction in the commodity price during the year, the pre-tax fair values of the producing and development assets were assessed at the balance sheet date based on the lower commodity price environment. Consequently, the assets were impaired on a pre-tax basis by $126.7 million and on a post-tax basis by $63.4 million. In addition, impairment of investments amounted to $42.1 million.
Ophir’s exploration expenses for 2015 amounted to $183.1 million, compared to $333.8 million in 2014.
Ophir’s capital expenditure for the year totalled $174.7 million. This predominantly comprised investments on exploration activities in Myanmar, Thailand and Indonesia; FEED studies for the Fortuna FLNG project in Equatorial Guinea; and a seismic and water handling upgrade for the Bualuang field in the Gulf of Thailand.
Nick Cooper, CEO of Ophir Energy plc commented: “The upstream model of the past decade is clearly broken.
Cooper added: “Exploration costs are approaching 30 year lows and quality opportunities for future growth are plentiful. Provided we continue to focus capital at assets that can deliver strong returns in the ‘new normal‘ of lower oil and gas prices then we are confident of driving superior NAV growth.”
Ophir said it was on track to make FID for its Fortuna floating LNG project in Equatorial Guinea in mid-2016, leading to first production in the second half of 2019, for which, Ophir said, the company is fully funded.
In 2016, the oil company said it would look to finalise gas off-take agreements for which the company agreed heads of terms in 2015; award EPCIC contracts for the sub-sea production system; finalise the agreement with Schlumberger to acquire a 40% economic interest in the field in return for reimbursing 50% of Ophir’s back costs; submit and receive approval of the development plan and sign the umbrella agreement with the Government of Equatorial Guinea.
Capex for 2016 slashed
Ophir’s production in 2016 is expected to be between 10,500 and 11,500 boepd and the company scopes for it to increase to around 30,000 boepd in its base case for 2020.
Regarding the company’s outlook for 2016 and beyond, Ophir said the company has reviewed its plans for the remainder of 2016 in case the low oil price environment continues beyond the current year. The oil company has therefore reset its guidance for 2016.
The company’s revenue is forecast at $140-160 million for 2016, with cash flow from producing assets of $75- 100 million, while capital expenditure forecast for 2016 is revised downwards to $150-200 million.
Ophir Energy also on Thursday took over operatorship of CI-513 licence area in Côte d’Ivoire as the company’s PSC with African Petroleum became effective after being signed by the final government Ministry.
Offshore Energy Today Staff