Ophir Energy, an independent oil and gas exploration company focused on Africa, has reported net profit after tax of US$339.1 million the six months ended 30 June 2014, compared to $19.4 million loss in the same period last year.
The rise in profit reflects the gain on sale of a 20 per cent. interest in Tanzanian Blocks 1, 3 and 4 for $1.25 billion (pre-tax) with a further US$38 million payable on Final Investment Decision.
In the first half of the year the Company drilled four exploration wells, resulting in one success in Tanzania and three dry holes in Gabon. In the second part of the year, Ophir plans to drill three exploration wells, two appraisal wells, and will carry out two flow tests across its assets in Equatorial Guinea and Tanzania.
Total capital expenditure for the year is now estimated to be c.US$600 million reflecting the increased drilling, seismic and commercial activity Ophir is undertaking during 2014 as compared to prior years.
2015 Capex cut
However, Ophir has said that after a very active year drilling-wise, next year will see a greater focus on seismic acquisition and interpretation across the portfolio alongside analysis of the considerable volume of well data from this year’s drilling activities and on ongoing pre-development work on the Company’s LNG projects.
The company expects that that its capital expenditure in 2015 will be approximately half the level of 2014.
The company’s Board, after assessing the near-term capital needs of the business and the “discount the company’s shares are trading at in relation to the underlying core value of the asset base”, has approved a share buyback programme of up to US$100 million.
Nicholas Smith, Chairman, said: “The highlight in the first half of 2014 was the completion of our transaction in Tanzania with Pavilion Energy. This was the culmination of several years of hard work by the Company and is testament to Ophir’s strategy of monetising exploration success in a timely manner. The proceeds from the deal leave the Company well financed through 2015.”