Continental Focus, International Reach

Equa G Denies Fortuna Extension

Tuesday, January 8, 2019

Ophir Energy received notification from the Equatorial Guinea Ministry of Mines and Hydrocarbons that the Block R License, which contains the Fortuna gas discovery, will not be extended following expiry of the license on 31 December 2018.

As a consequence, there will be an additional non-cash impairment of the asset, expected to be around $300 million, in Ophir’s full year financial results following the impairment taken in the half year results reported in September 2018.

According to the company, it remains focused on implementing the strategy outlined in its announcement on September 13 and options available to maximize value for shareholders. In this regard, the Board would highlight the recent updates it has provided to the market in respect of its Southeast Asia assets, which it believes demonstrate the underlying quality of these assets including its recent acquisition of Santos.

Ophir and Medco have entered into discussions about a possible cash offer to be made by Medco for the entire issued and to be issued share capital of Ophir. Discussions with Medco have taken place in the shared knowledge that there were a number of potential outcomes with respect to our Fortuna asset, and these discussions continue.

Alan Booth, Interim CEO of Ophir, commented, “It is disappointing that the Ministry has decided not to extend the license, despite the amount of effort and cost dedicated to the delivery of the project and especially as we were still talking to highly credible potential co-investors. Nevertheless, we will continue to work constructively with the authorities in Equatorial Guinea. I should like to thank everyone in the Ophir project team; you gave this your very best endeavors.

Looking ahead, the Group’s cashflow, capital commitments and growth prospects will be focused in Southeast Asia, where we have built a robust operating platform capable of delivering value to shareholders.”