Half Year Results

Ophir Energy plc

Half Year Results for the six months ended 30 June 2012

London, 29 August 2012: Ophir Energy plc ("Ophir" or the "Group") announces its Half Year Results for the six months ended 30 June 2012.

2012 Half-yearly results summary:

Ophir has had a successful first half of 2012. The Group's track record of frontier exploration discovery continued with two discoveries in the first half of 2012, followed by two further successes in July and August. The Group has opened up a new offshore gas province in Tanzania, is continuing with exploration efforts in Kenya and Gabon, and has advanced its position in Equatorial Guinea closer to commerciality. With the acquisition of Dominion Petroleum Limited ("Dominion"), the Group now has the largest deep-water acreage position offshore East Africa. Ophir's assets in both West and East Africa continue to provide significant frontier exploration running room, creating multiple opportunities to increase the Group's resource base. A successful equity placing in 2012 Q1 raised US$242 million and has provided Ophir with the capital to further explore the resource potential within the BG Joint Venture Tanzanian Blocks (1, 3 and 4) and elsewhere.

Key highlights:

§ Continued success in the offshore gas province in Tanzania: discoveries to date in excess of 7 TCF recoverable resources (1.2 BBOE)

§ Strengthened balance sheet by raising US$242 million through an equity placing of 30.5 million new ordinary shares at 495p; closed June 2012 with a cash balance US$454 million

§ Completed the acquisition of Dominion on 2nd February 2012 becoming the largest acreage holder offshore East Africa and securing acreage within the emerging offshore Kenya play

§ Continued drilling success in Equatorial Guinea with the first two wells of the 2012 campaign and drilling of the 3rd well currently underway

§ Completion of a 3D seismic acquisition programme to explore a potential continuation of Tertiary basin floor fan prospectivity from Mozambique into the eastern portion of Block 1, Tanzania. Preliminary processing, mapping and interpretation is expected by Q3 2012

§ Processing of the pre-salt 3D seismic survey obtained in Gabon is approximately 50% complete. Ophir and Petrobras expect to receive the final processed dataset in Q4 2012

Ophir's Chairman, Nicholas Smith commented:

"In the first half of 2012 we maintained our successful exploration track record and delivered our largest discovery to date (Jodari-1: 3.4 TCF Recoverable). We have so far had 100% drilling success with the first six frontier exploration wells in Tanzania and also with the first two wells in our 2012 drilling programme in Equatorial Guinea. Ophir cemented its leading position in East Africa with the successful acquisition of Dominion Petroleum, and is now actively exploring the new acreage in Tanzania and Kenya. Our equity placing in April 2012 provided the Group with the necessary funding to further explore the resource potential within Blocks 1, 3 and 4 and also to progress the rest of our portfolio. We look forward to continuing our active exploration programmes through the second half of 2012 in the key plays of both East and West Africa."

Enquiries

Further information

Ophir Energy (OPHR.LN) is an African focussed, upstream oil and gas resource company which is a member of the FTSE 250. The Group's headquarters are located in London (England), with operational offices in Perth (Australia), Malabo (Equatorial Guinea), Dar es Salaam and Mtwara (Tanzania), Dakar (Senegal), Port Gentil, Gabon and Nairobi (Kenya).

Ophir is one of the top five deepwater acreage holders in Africa, with a portfolio of 21 assets in 10 African jurisdictions.

For further information on Ophir, please refer to www.ophir-energy.com 

Tanzania

Blocks 1, 3 and 4

Exploration activity continues for the Ophir - BG Group Joint Venture, with a 100% success rate on the six wells drilled to date. The Group has identified three potential gas plays across Blocks 1, 3 and 4:

i) Tertiary Intraslope Play

ii) Upper Cretaceous Intraslope Play

iii) Tertiary Basin Floor Fan Play

To date the Joint Venture has discovered ca. 7 TCF (1.2 BBOE) of recoverable resources in the Tertiary Intraslope Play and ca. 2.5 - 8.0 TCF (0.4 - 1.3 BBOE) of in place resources in the Upper Cretaceous Intraslope Play. Significant additional drilling inventory has been identified in both plays.

Ophir's largest discovery to date, Jodari-1, exceeded pre-drill expectations. Significantly greater aggregate pay thickness and excellent net to gross ratio in the Lower Tertiary intervals resulted in a 3.4 TCF mean recoverable resource estimate. Jodari-1 was the fourth well drilled by the Ophir-BG joint venture and was the first well to be operated by BG. Spudded on 7 January 2012 in 1,153m of water, the well was drilled by the drillship "Deep Sea Metro 1" to a total depth of 4,465m subsea in 73 days.

The Mzia-1 well followed. Mzia was a play opening discovery in the Upper Cretaceous outboard of the Rovuma Delta with an in-place resource range of 2.0 - 6.0 TCF (0.3 - 1.0 BBOE) and which calibrated a number of comparable Upper Cretaceous seismic anomalies. The top hole of Mzia was drilled between 1 January and 5 January, prior to drilling Jodari-1. The Deep Sea Metro 1 arrived at the Mzia-1 location on 2 April to re-enter the well. The well spudded in 1,639m of water and drilled to a total depth of 4,858m subsea.

Next, Papa-1 delivered a play opening discovery in the Upper Cretaceous outboard of the Rufiji Delta with a preliminary in-place resource range of 0.5 - 2.0 TCF (0.08 - 0.3 BBOE). Detailed core and petrophysical analysis will confirm the scale of the discovered resource. The well spudded on 29 May 2012 in 2,186m of water and was drilled by the drillship Deep Sea Metro 1 to a total depth of 5,544m subsea in 57 days.

In March 2012, the Joint Venture acquired a new 3D seismic programme in Block 1 to the east of the existing 3D data coverage, with the objective of delineating a potential extension of the Tertiary Basin Floor Fan play into Block 1 from adjacent Mozambique acreage. This play has been successful in the adjacent ENI-operated Block in Mozambique with gas volumes in excess of 60 TCF having reportedly been discovered. The 2,500 sq km survey by the Fugro vessel, Geo Coral, was completed in May. The delivery of the final processed data is expected in Q3.

East Pande

In East Pande, the 2,200 sq km Ndizi 3D survey commenced in January utilising the Fugro vessel Geo Caribbean. This survey was designed to mature leads identified on pre-existing 2D seismic data for possible drilling in 2013. The survey was completed in February. Fast-track post-stack migration data was received in March and final data is expected in Q3 2012 with a view to drilling in the first half of 2013, subject to rig availability.

Block 7

Ophir completed the acquisition of Dominion in February 2012 and thereby added Block 7 to its existing portfolio in Tanzania.

BGP acquired a 1,215.5 km 2D seismic survey in Block 7 in February. In addition, existing 3D Data from Block 7 is being reprocessed with delivery expected in Q3. At the end of 1H 2012 preparation was also under way for a large multi-Block 3D seismic shoot which will include the 1,260 sq km Upanga 3D survey in Block 7. This new 3D survey, together with the new 2D and reprocessed 3D, will allow a full prospectivity review of the Block ahead of possible drilling early in 2013.

Data rooms are planned for East Pande and Block 7 during 2H 2012 with a view to bringing in a strategic partner to help fund forward expenditure.

Kenya

Ophir completed the acquisition of Dominion in February 2012 and thereby entered Blocks L9 and L15 in Kenya.

Agreement was reached with Apache, the Operator in Block L8 immediately to the north of Block L9, to extend their 3D seismic survey into Block L9. This survey was principally designed to cover the Mbawa prospect which will be drilled by Apache later in 2012. The extension of the survey into Block L9 covered the Mbawa South prospect which could provide an attractive target for future drilling. Although on the same trend as Mbawa, the Mbawa South prospect has significant differences which are currently being assessed on the Apache 3D dataset.

Additional legacy 2D seismic data is also being interpreted and a range of play types are being assessed and included in a full prospectivity assessment of the Block. At the end of 1H 2012 preparation was under way for a large multi-Block 3D seismic shoot which will include the 1,550 sq km Nala 3D survey in Block L9 and the 832 sq km Ndoto 3D survey in Block L15.

Data rooms are planned for L9 and L15 during 2H 2012 with a view to bringing in a partner to fund forward expenditure.

Equatorial Guinea

In 2008 Ophir drilled two discoveries on Block R: Fortuna-1 on a Tertiary slope turbidite play and Lycos-1 on a Tertiary thrust belt play.

In November 2011 Ophir were granted an areal extension to Block R which contained two further gas discoveries, Estrella del Mar and Oreja Marina, drilled in the thrust belt play by the previous operator. Both have a similar seismic signature to the Lycos discovery, and the block contains several similar prospects.

During the first half of 2012 Ophir started a second drilling campaign that is designed to appraise the reserves encountered in the Fortuna-1 discovery, and to test exploration prospects in the immediate vicinity, and on the extended PSC area. In January a contract was signed for the Eirik Raude, a fifth generation semisubmersible drilling rig operated by Oceanrig, to drill three wells with multiple exploration and appraisal targets. The rig mobilised to Equatorial Guinea in late June.

The first of the three wells in the 2012 campaign was the Tonel-1 prospect, located in the extended portion of Block R. Tonel-1 tested a previously undrilled structure which had a similar seismic signature to the Lycos, Estrella-del-Mar, and Oreja Marina discoveries, but was considerably larger in extent than any of them. The well spudded on 7 July 2012 in a water depth of 1,599m and was drilled to a total depth of 3,072m subsea.

A 182m gas bearing column was encountered, containing a total 117m of net pay in mid-Miocene aged sands, trapped within a thrust belt anticline. The gas quality is consistent with that observed in the previous discoveries in Block R. Gross in place mean resources for the discovery are estimated at 1.1 TCF (177 MMBOE). Gross recoverable mean resources are estimated of 800 BCF (133 MMBOE), comfortably exceeding mean, pre-drill estimates of 708 BCF (118 MMBOE).

The second of the wells in the 2012 campaign was the Fortuna East-1 (R5) well. Fortuna East-1 is located 7 km ESE of the Ophir Fortuna-1 discovery and had three objectives, each of which was successfully achieved:

1) Primary objective to confirm the eastern extent of the Fortuna Complex

2) Secondary objective to test the Viscata exploration target, and

3) Tertiary objective to encounter the laterally equivalent potential reservoir intervals for the Tranquilla and Iambe prospects.

Fortuna East -1 (R5) encountered a 55m gas bearing column containing a total 40m of net pay in the primary target Late Miocene sands of the eastern lobe of the Fortuna Complex. The gas quality appears to be consistent with that observed in previous gas discoveries in Block R. Pressure measurements indicate communication between Fortuna-1 and Fortuna East 1 confirming an increased 101m gas column in the Fortuna Complex.

Gross mean recoverable resources for the Eastern lobe of the Fortuna Complex as defined by this well are 426 BCF (71 MMBOE), exceeding pre-drill estimates of 304 BCF (51 MMBOE). Confirmation of the Eastern lobe, will increase the contingent resources (2C) category of the Fortuna Complex to 798 BCF (133 MMBOE)

The last well in the 2012 campaign will be Fortuna West.

The Tonel and Fortuna East successes add further resources to the Fortuna Complex. These results provide anchor assets for the LNG development and are approaching the minimum commercial threshold for a gas development providing part of the feed gas for a second LNG train.

Ophir plans to farm-out part of its interest in Block R following the drilling campaign.

Gabon

In Mbeli and Ntsina the 2,200 sq km 3D seismic survey focussed on the pre-salt section was completed in February. Processing of the survey will require complex pre-stack depth migration typical of pre-salt exporation. This is time-intensive and final processed data will not be available until late in 2012. Initial indications are that the data is of a very high quality. Preliminary well planning work is underway and Ophir intends to purchase long-lead items (casing and wellheads) in 2H 2012 in preparation for the planned 2013 drilling.

Extensions to both the Manga (7 months) and Gnondo (17 months) PSC terms have been agreed with the Government of Gabon. These will allow the acquisition, processing and interpretation of the recently acquired 3D seismic surveys in each Block, together with sufficient time to farm-out if warranted, ahead of potential drilling in one or both Blocks during 2013.

A 200 sq km 3D survey was acquired by Polarcus over the Pachg Liba prospect in the Gnondo PSC area between January and February. The survey was designed to reduce the technical risk on the Pachg Liba prospect ahead of possible 2013 drilling. Fast-track data has been received and the final dataset is due in August.

The 620 sq km 3D seismic survey was completed in February. This survey was designed to mature a series of potential stratigraphic plays identified on 2D seismic outboard of the Loiret Dome feature. The seismic survey extends into the Ntsina Block.

AGC

Post well studies followed the drilling of the unsuccessful Kora-1 well in 2011. The well data has been used to redefine potential play fairways and new potential drilling targets with a number of potential leads identified. The JV will be faced with a decision to enter the next term, which carries a well commitment, or drop the PSC altogether prior to the end of the current term on 19th September. The existing JV partners (Ophir, Noble, Rocksource and FAR, together with Entreprise the free-carried state entity) are considering an alternative plan to drop the block and immediately re-apply for a new PSC.

Madagascar

The technical evaluation of the Block has been completed and a farm-in partner is being sought prior to drilling.

Somaliland

The Government of Somaliland agreed to revised terms for the Berbera PSA in March 2012 which includes a 750 km 2D seismic commitment. The deed of amendment was signed on 30 March 2012. The revised terms also include an addition to the block area. This extension contains a number of potential closures which will be partly covered by the new seismic data. Planning for the survey commenced during 1H 2012 and at June 30 a contracting strategy had been completed and approved with a view to acquiring the data during late Q3 or Q4 2012.

The objective is to find a partner to share future exploration expenditure.

Congo (Brazzaville)

Ophir assumed Operatorship of the Block during 2011 and acquired a 3,908 sq km gradiometry survey over a series of potential pre-salt features during February. At end June the data processing had been completed and was being iterated with the seismic data.

Initial indications are that the pre-salt structures may be limited in area and work is ongoing to quantify the potential prospect volumes ahead of a decision point in October 2012.

DRC and Uganda

At end of 1H 2012 Ophir took steps to close the office in Uganda and relinquish Block 4B. An application to relinquish the Block has been made to the Ugandan government.

Effective 20 July 2012 Ophir completed the sale of DRC Block V to Soco International plc and notified the government accordingly. 

Result for the Period

The Group's performance over the first six months of 2012 provided a strengthened balance sheet due to both the successful acquisition of Dominion in February and a further capital placing in April. The placing of 30.5 million shares raised US$242 million which will go towards part-financing the expanded 2012/2013 drilling programme of:

·; The BG operated Blocks 1,3 and 4 joint venture

·; East Pande (Tanzania)

·; Block 7 (acquired with the Dominion transaction: Tanzania)

·; Block L9 (acquired with the Dominion transaction: Kenya)

It is also planned to utilise funds for additional exploration work in Gabon.

As a result of the acquisition of Dominion, the Group acquired a portfolio of 5 blocks in offshore Tanzania, Kenya, Uganda and DRC, 4 of which are operated by Ophir and strengthens the Group's position as the leading independent oil and gas explorer in the East African offshore play.

The interim financial statements include the balance sheet of Dominion with provisional fair value adjustments. Revenues and expenses from the acquired assets are consolidated with effect from the acquisition date.

For the period ended 30 June 2012 the Group recorded a loss of US$24.4 million (30 June 2011: US$6.1 million profit). No dividends were paid or declared by the Group during the period. The loss is a direct result of additional costs due to Ophir Energy listing and the associated regulatory and corporate costs. Increases in staff in the management team, technical areas and general London office have also impacted. Infrastructure costs resulting from the growth of the London office has also contributed to the loss.

The loss for the period, includes exploration expenditure expensed of US$2.1 million (30 June 2011: US$1.1 million), general and administrative costs of US$21.8 million (30 June 2011: US$6.1 million), finance costs of US$0.4 million (30 June 2011: US$0.2 million) and other expenses of US$0.9 million (30 June 2011: US$0.4 million).

Cash balances as at 30 June 2012 were US$454.1 million (30 June 2011: US$65.3 million / year ended 31 December 2011: US$396.6 million).

Capitalised exploration costs for the period ended 30 June 2012 were US$148.8 million (30 June 2011: US$28.6 million).

Exploration Expenditure

Exploration expenditure in the 6 months to 30 June 2012 is comprised of pre‑licence exploration costs of US$2.1 million (30 June 2011: US$1.1 million of which US$0.5 million related to pre-licence exploration costs and US$0.6 million exploration expenditure written off) charged directly to the Income Statement for new business development.

Administrative Expenses

Administrative expenses totalled US$21.8 million (30 June 2011: US$6.1 million). The variance was due to increased infrastructure costs relating to the increased London presence, which include ongoing listing and governance costs, increased consultancy costs for corporate advisory and corporate promotional costs. Additionally, increases in headcount at both the corporate level and in the technical team in Perth due to increased activity and additional acreage and operating requirements resulting from the acquisition of Dominion, have further contributed to the increase. The increase in administrative expenses has also been impacted by one off costs of US$5.7 million (31 December 2011: US$3.2 million / 30 June 2011: nil) incurred in relation the acquisition and integration of Dominion.

Finance Expenses

Finance costs for the period of US$0.4 million (30 June 2011: US$0.2 million) relate to foreign exchange losses arising on the fluctuation of Ophir's functional currency, the US Dollar, against other currencies.

Other Expenses

Other expenses of US$0.9 million (30 June 2011: US$0.4 million) primarily consist of US$0.5 million depreciation and amortisation and relates to the write down of the Group's furniture and equipment and geological databases over their estimated useful lives. A further US$0.4 million consists of an impairment loss on disposal of the DRC asset.

Cash Flow

The Groups net cash inflow for the period was US$57.8 million (30 June 2011: US$24.5 million cash outflow).

Operating Cash Flow

The Groups net cash used in operating activities was US$19.2 million (30 June 2011: US$2.2 million). The Group had $2.1 million (30 June 2011: US$0.6 million) related to exploration expenditure that was written off.

Investing Activities

Cash flow used in investing activities was US$162.2 million (30 June 2011: US$18.8 million). Exploration expenditure of US$138.6 million (30 June 2011: US$41.5 million) related to amounts spent on Gabon, the drilling campaign in Equatorial Guinea and on activities in East Pande and Blocks 1,3 and 4 in Tanzania.

Financing Activities

The net cash inflow from financing activities was US$239.1 million (30 June 2011: US$3.5 million cash outflow) which was primarily a result of the net capital raise in April 2012.

As at 30 June 2012, the Group's cash and cash equivalents were US$454.1 million (30 June 2011: US$65.3 million / year ended 31 December 2011: US$396.6 million).

Non-Current Assets

As at 30 June 2012, intangible assets consisted of exploration and evaluation assets totalling US$695.0 million (30 June 2011: US$297.8 million / year ended 31 December 2011: US$327.1 million) and goodwill of US$57.4 million (30 June 2011: nil / year ended 31 December 2011: nil). Additions in the period to 30 June 2012 consisted of US$148.8 million to the Group's existing exploration and evaluation assets and US$228.0 million of exploration and evaluation assets and US$57.4 million of goodwill following the acquisition of Dominion in February.

Full details of the acquisition are contained in note 6 to the interim financial statements.

Current Assets

The Group's current assets grew to US$482.9 million (30 June 2011: US$97.0 million / year ended 31 December 2011: US$412.0 million) mainly as a result of the increase in cash and cash equivalents.

Liabilities

Total liabilities as at 30 June 2012 were US$139.4 million (30 June 2011: US$34.0 million / year ended 31 December 2011: US$28.9 million). The increase in the period was due to the addition of a deferred tax liability of US$57.2 million (30 June 2011: nil / year ended 31 December 2011: nil) recognised following the acquisition of Dominion and US$46.1 million (30 June 2011: US$8.4 million / year ended 31 December 2011: nil) of expenditure accrued in relation to drilling activities in Equatorial Guinea and Tanzania.

Going Concern

The financial position of the Group, its cash flows, liquidity position and borrowing facilities, and its business activities, together with the factors likely to affect its future development, performance and position are set out in this Business Review and in the Group's 2011 Annual Report on pages 2 to 27. In addition, note 27 to the 2011 Financial Statements includes the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

In making their going concern assessment, the Directors have considered Group budgets and cash flow forecasts for a period of at least the next 12 months.

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and is well placed to meet its exploration and appraisal commitments for at least the next 12 months. Thus they continue to adopt the going concern basis of accounting in preparing the interim financial statements.

Commitments and Contingent Liabilities

In acquiring its oil and gas interests, the Group has pledged that various work programmes will be undertaken on each permit/interest. The exploration commitments are tabulated in note 13 to the Interim Financial Statements and are an estimate of the minimum expected cost of performing these work programmes. As at 30 June 2012 the Group had no contingent liabilities.

Risk Management

The Executive Directors continually monitor the Group's risk exposures and report to the Audit Committee and Board of Directors on a six monthly basis or more frequently as required.

The principal risks of the Group remain as detailed on pages 26 to 27 of the 2011 Annual Report and are available on www.ophir-energy.com:

Strategic Risks: Political risk, reliance on key personnel, investment decisions, commercial risk.

Exploration Risks: Drilling operations risk, discovery risk and success risk, availability of rigs and services.

Operational Risks: HSE incident risk, insurable risks.

Financial Risks: Counterparty credit risk, liquidity risk, interest rate and foreign exchange risk

External Risks: Sovereign risk, legal, regulatory or litigation risk, investor and stakeholder sentiment.

Financial strategy and outlook

Our financial strategy continues to be to actively manage our portfolio in order to support the planned exploration and appraisal programmes. This position has been strengthened by the April 2012 equity raising and by the divestment of non-core assets in DRC and Uganda. The Board continues to assess all available funding options for the growth of the business . The Group has sufficient capital to meet its ongoing working capital requirements over the next 12 months.

The Directors confirm that to the best of their knowledge:

a the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting";

b the half year report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year);

c the half year report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein);

The Directors of Ophir Energy plc are as listed in the Corporate Directory at the back of this report.

By order of the Board

Ron Blakely

Director

28 August 2012

Disclaimer

This statement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst the Group believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Group's control or within the Group's control where, for example, the Group decides on a change of plan or strategy. Accordingly, no reliance may be placed on the figures contained in such forward-looking statements.,

Introduction

We have been engaged by the Company to review the condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 30 June 2012 which comprises the condensed consolidated income statement and statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and related notes 1 to 16. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As noted in note 2, the annual financial statements of the Group are prepared in accordance with the International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Ernst & Young LLP

London

28 August 2012

The maintenance and integrity of the Ophir Energy plc web site is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial information since it was initially presented on the web site. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

1(6.5) cents per share

22.71/2.51 cents per share

3(7) cents per share

Approved by the Board on 28 August 2012

Ron Blakely

Director

Following the Dominion acquisition on 2 February 2012 and subsequent decision to divest its non-core assets, Ophir Group entered into negotiations to sell its 46.75% interest in Block V in the Albertine Graben in the Democratic Republic of Congo. The asset which was previously held by the Group's subsidiary Dominion Petroleum Congo SPRL was subsequently sold to SOCO Exploration & Production DRC for a total consideration of US$8,720,552 on 20 July 2012.

An impairment loss of US$351,320 on the revaluation of the asset on disposal to the lower of its carrying value and its fair value has been recognised in other expenses (note 3c).

6 Acquisition of subsidiaries

The Ophir Group acquired 100% of the share capital of Dominion Petroleum plc, an AIM quoted group of companies operating in the oil and gas exploration industry on 2 February 2012 (the acquisition date). The Group announced that the scheme of arrangement approved by Dominion's shareholders on 12 December 2011 was sanctioned by the Supreme Court in Bermuda effective on 2 February 2012.

As a result of the acquisition the Group acquired a portfolio of 7 blocks in offshore Tanzania, Kenya, Uganda and DRC, 4 of which are operated by Ophir and strengthens the Group's position as the leading independent oil and gas explorer in the East African offshore play.

The interim financial statements include the balance sheet of Dominion including fair value adjustments. Revenues and expenses from the acquired assets are consolidated with effect from the acquisition date.

The purchase consideration of US$220,221,437 was satisfied by a combination of cash and equity. The Group issued 38,790,455 new shares in consideration for the entire share capital of Dominion. The fair value of the shares was the published price of the shares of the Group at the acquisition date which was £2.951 (US$4.68). Therefore, the fair value of the share consideration given was US$181,539,329. The remaining purchase consideration amount of US$38,682,108 was paid in cash. Transaction costs relating to the acquisition of US$3,709,030 have been expensed and are included in administration costs.

The fair value assessment of the Dominion assets and liabilities acquired has been reviewed in accordance with the provisions of IFRS 3 - Business Combinations. The fair values are provisional as at 30 June 2012 due to the complexity of the acquisition and due to the inherently uncertain nature of the oil and gas sector, in particular, in valuing intangible exploration and evaluation assets. The review of the fair value of the identifiable assets and liabilities acquired will be completed within 12 months of the acquisition at the latest.

The provisional fair values of the identifiable assets and liabilities of Dominion as at the date of acquisition and the corresponding carrying values immediately before the acquisition were:

Goodwill of US$57.4 million arises on acquisition. The goodwill on the transaction has principally arisen as a result of the requirement to recognise US$57.2 million of deferred income tax assets and liabilities representing the tax effect of the differences between the assigned fair values and the tax bases of assets acquired and liabilities assumed in a business combination at amounts that do not reflect fair value. None of the goodwill recognised is expected to be deductible for income tax purposes.

The balance of the goodwill being US$0.17 million is attributable to the synergies expected to arise from Ophir's current operations which are based in the same East African offshore play as other exploration and evaluation assets acquired.

From the date of acquisition to 30 June 2012 Dominion contributed US$3,002 to Group revenue and US$5,122,307 to Group loss. If the combination had taken place at the beginning of the year, Group revenue and loss for the period to 30 June 2012 would have been US$13,002 and US$9,273,175 respectively.

Cash at banks earn interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of up to 12 months, depending on the immediate cash requirements of the Group and earn interest at the various short-term deposit rates.

(1)38,790,455 ordinary shares issued as part of the Dominion acquisition (note 6).

30,500,000 ordinary shares issued in relation to the placement and capital raising announced by the Company on 28 March 2012.

14 Contingent liabilities

As reported in the 2011 financial statements an individual had previously commenced action against the Group relating to an evaluation of an interest that was held in exploration blocks within the portfolio. The Group applied for summary judgement of the claim, which was heard in the High Court on 27 April 2012. On 15 June 2012, summary judgement was made in favour of the Group in respect of the whole of the claim. The 21 day period during which the claimant could appeal the judgement has now expired.

15 Related party transactions

As disclosed in the Company's Annual Report and Accounts 2011, in April 2012 the Group completed an equity placing of 30.5 million new ordinary shares of 0.25 pence at a price of 495 pence raising $242 million (£150.9 million).

Pursuant to the placing the Company placed 1,650,000 new ordinary shares with the Kulczyk Group a related party of the Company for the purpose of the Listing Rules as it held in excess of 10% of the issued share capital of the Company at 28 March 2012. The placing to the Kulczyk Group was on the same terms as to other subscribers and no commission was payable to them in respect of such placing.

The aggregate value of the new ordinary shares placed to the Kulczyk Group at the placing price of 495 pence per ordinary share was £9.17 million representing 0.42% of the market capitalisation of the Company as at the close of business on 27 March 2012 and as a result of which the Kulczyk Group held 10.20% of the issued share capital of the Company as at 2 April 2012.

16 Events after the reporting period

Except for the sale on 20 July 2012 of the Group's 46.75% interest in Block V in the Albertine Graben in the Democratic Republic of Congo as detailed in note 5, there were no subsequent events after the reporting period.