13th Aug 2015 06:37
LONDON (Alliance News) - Ophir Energy PLC Thursday said it has increased its full year production guidance and slashed its spending for the rest of the year as the company tries to restructure the company for a USD50 per barrel environment after swinging to a substantial pretax loss in the first half of 2015.
The FTSE 250-listed oil and gas company said it swung to a large YSD123.3 million pretax loss in the first half of 2015 from a USD589.4 million profit as revenue came in at USD86.5 million compared to nil a year earlier.
The loss was caused by exploration expenses, including write-offs, rising to USD94.9 million in the first half from USD67.7 million as depreciation, impairments and provisions increased to USD23.0 million from USD774,000, partially offset by administrative expenses falling by a fifth to USD19.4 million from USD27.2 million.
Ophir also booked a USD673.0 million gain in the first half of 2014 related to the sale of its interest in Tanzania Blocks 1, 3 and 4 to Pavilion Energy PTE LTD, which was not repeated in the most recent half.
Ophir reported a cash balance of USD708.2 million at the end of the first half, significantly down from USD1.17 billion at the end of 2014. Gross debt stood at USD316.2 million, resulting in a net cash position of USD392.0 million.
Ophir slashed its capital expenditure as expected, falling by over 50% in the first half, and the company said full year expenditure will be between USD250 to USD300 million, before it makes further cuts to its 2016 expenditure, it said.
On top of that, Ophir said it has delivered USD60.0 million in annual cost savings through efficiencies, job cuts and office closures.
That is all response to the fall in oil prices, and Ophir said it is prepared for USD50 per barrel environment and said it is only progressing investments that offer "strong returns" whilst restricting expenditure.
"In a tough operating environment for E&P companies Ophir continues to differentiate itself through the robustness of its financial position, the progression of its field development plans and a commitment to acquire quality exploration acreage with minimal financial commitments that offer attractive returns at current commodity prices," said Chief Executive Nick Cooper.
Average daily production came in at 14,600 barrels of oil equivalent per day in the first half, and the company pushed up its full year guidance to 11,000 to 12,500 barrels of oil equivalent per day. Ophir said the recent decline in oil prices, forecast underlying operating cash flow from the producing assets is revised to USD110 to USD130 million for the full year.
"The second half of the year will see the drilling of two low cost wells in the Gulf of Thailand in an unexplored basin adjacent to the Bualuang oil field," Cooper indicated.
By Joshua Warner; [email protected]; @JoshAlliance
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