A Review of the Nigerian Energy Industry

Ophir widens losses

OMV-Farms-Into-Ophir-Energys-Deepwater-Blocks-in-Gabon20 March 2014, News Wires – London-listed explorer Ophir Energy dived deeper into the red as asset impairments and exploration write-offs hit its bottom line last year.

Ophir posted a loss of $245.9 million for 2013, down from a loss of $40.7 million a year earlier. The company currently generates no revenue.

Widening the company’s losses last year was a $172.4 million impairment charge, $167.3 million of which related to Block 7 off Tanzania following the drilling of the first well on the block, Mlinzi Mbali-1, which came up dry.

It also booked a $5.1 million impairment on the AGC Profond Block off Guinea-Bissau as a result of management’s assessment that no further expenditure on exploration and evaluation of hydrocarbons in the block was currently budgeted or planned within the current licence term.

Ophir also booked other operating expenses amounting to $46.4 million, up from $1.7 million in 2012, which is said were largely due to the $36.3 million goodwill written off as a result of the impairment related to Block 7.

Also hurting the company’s bottom line was the $54 million exploration expenditure write-off it booked following unsuccessful exploration activities in the Ghana Accra Block and licence relinquishments in the Congo Marine IX Block, Madagascar Marovoay Block 2102 and Kenya L15 Block.

It was not all doom and gloom however, during the year Ophir carried out a successful exploration and appraisal programme in Tanzania Blocks 1, 3 and 4 which included two exploration discoveries and three drill stem tests which confirmed good reservoir deliverability and flow rates at the upper end of its expected range.

Despite the wider losses, Ophir chief executive Nick Cooper said the company continued its operational progress in 2013 and gave a positive outlook for the year ahead.

“We have entered 2014 well financed to deliver the most extensive exploration programme in the Ophir’s history; targeting wells in Tanzania, Gabon and Equatorial Guinea,” he said.

“This programme will include several new plays, which, if successful, have significant follow on potential beyond any initial discovery.”


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