Petroleum Africa
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Friday, August 15, 2014
Ophir Energy has spent a significant amount of funds on its exploration program across Africa over the past six months or so. In the past the company’s drilling focus has been on its core assets but in 2014 the company shifted some of its focus to higher risk exploration activity in new basins and plays. According to the company, a large portion of its existing portfolio is being drilled in 2014, with high-impact upside still remaining for H2 in Equatorial Guinea and on the East Pande in Tanzania. Across these assets Ophir will be drilling a further three exploration wells, two appraisal wells, and conducting two flow tests in H2.
Despite its high-risk wells the company has thoroughly assessed its assets across the continent and is planning its exit strategy in more than one of them. According to its Interim Results, Ophir is negotiating an agreement to dispose of its interests in SADR in exchange for an overriding royalty. The company holds a 50% operated interest in four blocks: the Daora, Haouza, Mahbes, and the Mijek.
Across the continent Ophir had 75% stake in two blocks in Somaliland. In 2013 it farmed down a 50% stake and is now looking to divest itself of the remaining 25% stake. The blocks are SL 9 and SL 12 offshore Somaliland. Any divestiture of these blocks by Ophir is subject to government and JV approval.
These are not the first blocks the company has exited over the past year. Following the disappointment of the Starfish-1 well in the Offshore Accra Contract Area in 2013, the company elected not to proceed into the next PSC term after the initial exploration period expired in March. Its Profond Block in the AGC saw 3D seismic conducted in 2013 and while the company said a number of leads and prospects were identified, the PSC is set to expire in September. It saw a number of disappointments in Gabon recently although it will most likely continue on in the country at this point as its dry hole costs were minimized by its farm outs to Petrobras and OMV.
The company also revealed that it is well financed and while its capital expenditure (capex) for 2014 is significant it expects 2015’s to be much lower as it undertakes a period of analysis and preparation for its next phase of activity. While its 2015 capex should be much lower than this year’s, expect the company to bump it up quite a bit in 2016 as it returns to high-impact drilling.
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