20th Mar 2014 10:59
LONDON (Alliance News) - Ophir Energy PLC Thursday said its pretax loss widened significantly in its full-year 2013 as exploration write-offs and impairments hit the company.
The FTSE 250-listed oil and gas exploration company said its pretax loss widened to USD280.5 million from USD40.9 million the previous year as exploration expenses sky-rocketed to USD229.1 million from USD4.5 million in 2012.
The company is currently carrying out a vast exploration programme and is yet to produce any revenues.
Ophir said that it was hit by exploration expenditure write-offs totalling USD54.0 million during the period, which consisted of unsuccessful exploration activities in the Ghana Accra Block of USD14.3 million and licence relinquishments in Congo, Madagascar, and Kenya.
The company was also hit by USD172.4 million in impairment charges during the period, of which USD167.3 million relates to its Tanzania Block 7 following the drilling of Mlinzi Mbali-1, where Cretaceous targets were found to be water bearing after drilling.
Ophir also noted that its finance income increased to USD27.1 million from USD1.6 million, and its general and administrative expenses fell to USD32.1 million from USD36.4 million during the period.
During the period, Ophir added 254 million barrels of oil equivalent in net contingent resources after executing a successful exploration and appraisal programme in Tanzania Blocks 1, 3 and 4 which included two exploration discoveries, Ngisi and Mkizi.
The company said the new exploration discoveries have increased the total discovered resource at Blocks 1, 3 and 4 to 15.7 trillion cubic feet of gas at year-end, which underpins a minimum two five-million tonne per annum Liquefied Natural Gas Train, the facility where gas is turned into liquid for transportation, development in Tanzania along with domestic market commitments under its production sharing contracts.
Ophir said that due to the volume increase it is mulling over the potential of expanding Tanzania's first planned liquefied natural gas export terminal using a third LNG Train.
The LNG export terminal is expected to start shipping gas to customers from around 2020, with a final investment decision in 2016.
However, the company announced on Wednesday that it failed to find commercial oil and gas at targeted reservoirs at the Padouck Deep-1 well, offshore Gabon.
Ophir remained confident of the pre-salt play in Gabon, and three wells are expected to be tested across three plays in the next three months by Ophir.
The company also announced, during the period, a divestment of a 20% interest in Blocks 1, 3 and 4 in Tanzania to Pavilion Energy Corp for USD1.29 billion, which is due to complete imminently, and a strengthening of the company's financial position by raising USD837.6 million via a placing and rights issue during the period.
"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," Chief Executive Nick Cooper said in a statement.
Ophir Energy shares were up 2.9% to 258.96 pence Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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