Ophir Plans Drilling Up to Further 10 Wells in 2014

Ophir Energy plc provides an Interim Management Statement and Operational Update for the period 1 January 2014 to 15 May 2014.

Corporate Highlights

– Completed the sale of a 20% interest in Blocks 1, 3 and 4, Tanzania to Pavilion Energy. The Company received US$1,255million in cash including completion adjustments with a further US$38million payable on the final investment decision;
– Net cash balances of US$1,564million at the end of April which is stated post the payment of tax related to the Pavilion Energy transaction;
– Acquired 75% operated interests in two blocks offshore the Seychelles from WHL Energy;
– Provisionally awarded a 95% operated interest in Block AD-03 in the latest Myanmar offshore licensing round, representing Ophir’s first acreage position outside of Africa;
– Commenced high-impact operated exploration drilling campaigns in both West and East Africa using the Deepsea Metro I and Vantage Titanium Explorer drillships;
– Completed further portfolio rationalisation with the relinquishment of Ophir’s interests in the Offshore Accra Block in Ghana and Block L15 in Kenya.

Key Operational Events

East Africa

– In early January, Ophir announced that the Mlinzi Mbali-1 well on Block 7 Tanzania was completed without encountering significant hydrocarbon shows. Analysis of log data from this well has been completed, and has  provided useful information on the further prospectivity offshore northern Tanzania;
– The Deepsea Metro I drillship is currently drilling the Taachui-1 well on Block 1, Tanzania. This well is targeting c.1.4TCF of mean recoverable resource within Cretaceous aged reservoirs and results are expected towards the end of May. After Taachui-1, the rig will carry out a DST on the Mzia-3 well drilled last year. Following the Mzia-3 DST, a well will be drilled on the Tende-1 prospect on the East Pande Block before the rig moves to drill the Kamba/Pweza North exploration well on Block 4;
– Midstream development activities on the Tanzanian LNG project are progressing with the formation of an Integrated Project Team to deliver early works and pre-FEED. The site for the LNG plant has been proposed to the Tanzanian Government.

West Africa

– In Gabon, the three well exploration programme utilising the Vantage Titanium Explorer drillship is underway. In March, the Company announced that the Padouck Deep-1 well targeting the pre-salt play on the Ntsina Block had been unsuccessful. However, the well did de-risk a number of key play elements including the presence of thick, reservoir quality sands and a working hydrocarbon system. Ophir’s net share of the drilling costs of Padouck Deep-1 were largely carried by partners Petrobras and OMV;
– The Affanga Deep-1 well is currently drilling on the Gnondo Block with results expected later this month. The well is targeting an extension to the proven Ogooué Delta play with mean recoverable resources estimated at 170mmb. On completion of this well, the rig will return to the pre-salt play further to the north to drill the Okala prospect on the Mbeli Block;
– In late 2013, Ophir was provisionally allocated a number of blocks in the recent deepwater licensing round in Gabon. The award of these blocks is subject to the successful conclusion of PSC negotiations which are ongoing
– Progress continues to be made on the FLNG project to commercialise the Company’s gas resources in Block  R, Equatorial Guinea. In February 2014, it was announced that Petrofac had been appointed as development operator for the project up to the final investment decision. Ophir is assessing shortlisted candidates to provide a suitable midstream solution and the preferred vessel provider will be selected in due course;
– A three well exploration and appraisal campaign in Equatorial Guinea is planned utilising the Vantage Titanium Explorer on completion of the programme in Gabon.

Nick Cooper, CEO of Ophir Energy commented:

“Completion of the Pavilion Energy transaction in Q1 2014 has ensured that Ophir is advancing its asset base from a position of capital strength. Whilst the first wells in our current drilling programme, Padouck Deep-1 and Mlinzi Mbali-1 were commercially unsuccessful, they were high risk, play opening wells and the Padouck Deep-1 result has not diminished the potential of the pre-salt play offshore Gabon.

“There is significant potential upside in the remaining wells and in the plays being targeted this year. We expect to drill up to a further ten wells before year end as our two drillships continue their back-to-back programmes and also anticipate further progress on our two LNG projects in Equatorial Guinea and Tanzania through 2014.”

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Press Release, May 15, 2014; Image: Ophir