Sale of 20% Interest in Tanzania Blocks

Ophir Energy PLC

Sale of 20% Interest in Tanzania Blocks 1, 3 and 4 to Pavilion Energy for US$1,288 million

London, 14 November 2013, Ophir Energy plc ("Ophir" or the "Company") is pleased to announce that it has entered into an agreement to sell to Pavilion Energy a 20 per cent. interest in Tanzanian Blocks 1, 3 and 4 for a maximum consideration of US$1,288 million.

Highlights of the Transaction

· Consideration payable to Ophir on completion of the Transaction of US$1,250 million with further contingent consideration of US$38 million following the final investment decision in respect of development of Blocks 1, 3 and 4, currently expected to be in 2016;

· Introduction into the Blocks 1, 3 and 4 Joint Venture of a strong and well financed partner with access to gas markets in Asia including Singapore. Pavilion Energy is a wholly owned subsidiary of Temasek, a Singapore investment company;

· The Transaction is expected to complete in the first quarter of 2014; and

· Ophir will remain a significant investor going forward in Tanzania through its continued stake in the Joint Venture and exploration drilling in Block 7 and East Pande.

The sale is subject to regulatory, governmental and other third party approvals and approval by Ophir's shareholders. A circular setting out further details of the Transaction, together with the notice to convene a general meeting of the Company, will be posted to Ophir's shareholders in due course.

Ophir's CEO, Dr Nick Cooper, commented:

"We are delighted to have entered into this agreement with Pavilion Energy. Pavilion represents a positive addition to the Joint Venture as it progresses through into the development phase and is a high quality endorsement of Tanzania's first LNG development.

The sale is consistent with our strategy of adding value in the exploration and appraisal phase of the E&P cycle, monetising that value at the appropriate time and recycling that capital into further value creating opportunities. Tanzania remains a core part of our portfolio and we will continue to invest further in the country's growth through our exploration activities"

Pavilion Energy's Group CEO, Mr Seah Moon Ming, commented:

"This investment in Tanzania Blocks 1, 3 and 4 is a key milestone for Pavilion Energy to build up our LNG portfolio. It supports our plan to secure long-term energy supply at competitive prices to meet the need for clean energy in Asia. This is also important for us as we work to develop an Asian LNG hub"

Pavilion Energy's Chairman, Tan Sri Mohd Hassan Marican, commented:

"The natural gas developments in Tanzania hold tremendous potential - not just for Pavilion Energy but for Singapore and Asia. Pavilion Energy looks forward to the partnership with BG Group and Ophir Energy in realising the LNG project. The LNG from the Tanzanian project will provide another source of supply to the Asian markets"

Evercore is acting as lead financial adviser to Ophir on the Transaction, with J.P. Morgan Cazenove acting as joint financial adviser and sponsor.

A call with management will be held at 0800 GMT following this announcement. Participants can dial in using the following details:

Dial-in number: +44 (0) 1452 555 566

Conference ID: 10309261

ENDS

 FOR FURTHER ENQUIRIES PLEASE CONTACT:

Ophir Energy plc +44 (0)20 7290 5800

Nick Cooper, CEO

Richard Rose, Corporate Communications and Strategy

Brunswick Group +44 (0)20 7404 5959

Patrick Handley

Elizabeth Adams

Notes to Editors

1. About Ophir

Ophir Energy (OPHR.LN) is an African focused, upstream oil and gas exploration company which is listed on the London Stock Exchange (FTSE 250). Ophir has an extensive deepwater acreage position in West and East Africa acquired since its foundation in 2004.

The Group's headquarters are located in London (England), with operational offices in Perth (Australia), Dar es Salaam and Mtwara (Tanzania), Malabo (Equatorial Guinea), Libreville (Gabon), Nairobi (Kenya) and Accra (Ghana).

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

2. About Pavilion Energy

Pavilion Energy is a Temasek portfolio company. The company is focused on the global LNG supply chain to provide clean energy to support economic growth and contribute to a sustainable future in the region, with a vision to be established as a preferred regional LNG player in Asia.

Pavilion Energy has incorporated Pavilion Gas as a wholly-owned subsidiary of Pavilion Energy, to manage gas operations in Singapore. It is also investing in the distribution and trading of LNG in the region. Pavilion Energy has a committed capital of US$6.9 billion. With a global outlook and Asian roots, Pavilion Energy is uniquely placed to pursue partnership opportunities and new prospects around the region.

For further information on Pavilion Energy, please refer to www.pavilionenergy.com.sg

Disclaimer

THIS ANNOUNCEMENT IS A COMMUNICATION TO THE MARKET. NOTHING IN THIS ANNOUNCEMENT CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A PROSPECTUS OR A PROSPECTUS EQUIVALENT DOCUMENT.

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THE DISTRIBUTION OF THIS ANNOUNCEMENT IN JURISDICTIONS OTHER THAN THE UNITED KINGDOM MAY BE RESTRICTED BY LAW AND THEREFORE PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH RESTRICTIONS. ANY FAILURE TO COMPLY WITH THE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF ANY SUCH JURISDICTION.

Forward Looking Statements

This announcement includes statements that are, or may be deemed to be, "forward looking statements". These forward looking statements can be identified by the use of forward looking terminology, including the terms "anticipates", "expects", "intends", "may", "will", "believes", "estimates", "plans", "projects" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Continuing Group's results of operations, financial position, prospects, growth, strategies and the industry in which it operates. By their nature, forward looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward looking statements are not guarantees of future performance and the actual results of the Continuing Group's operations and financial position, and the development of the markets and the industry in which the Continuing Group operates, may differ materially from those described in, or suggested by, the forward looking statements contained in this announcement.

In addition, even if the results of operations, financial position and the development of the markets and the industry in which the Continuing Group operates are consistent with the forward looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the forward looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation, currency fluctuations, changes in its business strategy and political and economic uncertainty.

Forward looking statements may, and often do, differ materially from actual results. Any forward looking statements in this announcement speak only as of their respective dates, reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Continuing Group's operations, results of operations and growth strategy. Subject to the requirements of the FCA, the London Stock Exchange, the Listing Rules and the DTRs (and/or any regulatory requirements) or applicable law, the Company explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forward looking statements in this announcement that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this announcement.

Evercore Partners International LLP ("Evercore"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as lead financial adviser exclusively for Ophir and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Ophir for providing the protections afforded to clients of Evercore or for providing advice in relation to any matter referred to herein.

J.P. Morgan Limited, which conducts its UK investment banking businesses as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised and regulated in the United Kingdom by the Financial Conduct Authority. J.P. Morgan Cazenove is acting as joint financial adviser and sponsor exclusively for Ophir and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Ophir for providing the protections afforded to clients of J.P. Morgan Cazenove, nor for providing advice in relation to any matter referred to herein.

Details of the Transaction

1 Introduction

On 14 November 2013, the Group entered into a conditional agreement to sell to Pavilion Energy a 20 per cent. interest in each of the Blocks 1, 3 and 4 PSAs together with a corresponding proportion of the rights, obligations and liabilities under the Block 1, 3 and 4 JOAs and 17.6 per cent. of the issued share capital of each of Ruvuma Pipeline Company Limited, Mzalendo Gas Processing Company Limited and Fahari Marketing Company Limited (the "Midstream Companies"), which are the entities which have been established in connection with the commercialisation of the exploration activities in Blocks 1, 3 and 4 in Tanzania. The Group currently holds a 40 per cent. interest in the Blocks 1, 3 and 4 PSAs and a 35.2 per cent. interest in each of the Midstream Companies. The aggregate consideration to be received by the Group at Completion for the Transaction is approximately US$1,250 million. The Group is entitled to receive further contingent consideration of US$38 million in cash following the final investment decision in respect of Blocks 1, 3 and 4.

The disposal of the assets to Pavilion Energy is conditional upon, inter alia, the approval of the Government of Tanzania (the "Tanzanian State"), clearance from the FCC, the consent of the BG Group and the waiver or non-exercise by the BG Group of all of its Pre-Emption Rights. If the BG Group exercises its Pre-Emption Rights over each of Blocks 1, 3 and 4, the Group will dispose of the assets to the BG Group on the same terms and conditions as the agreement with Pavilion Energy. The Transaction is of sufficient size relative to that of the Group to constitute a Class 1 transaction under the Listing Rules and is therefore also conditional upon the approval of Shareholders.

2 Background to and reasons for the Transaction

One of the key components of the Group's strategy is to actively manage the Group's portfolio. Ophir prefers to take significant early entrant equity positions in core projects while retaining flexibility to divest as projects mature.

Having completed various development and engineering studies, the Board believes that development of gas discoveries in Blocks 1, 3 and 4, Tanzania, as well as development of associated LNG export infrastructure, will take significant time and will require considerable expertise and financial resources.

The Group is currently dependent on external funding for continuation of the exploration, appraisal and development of these assets and although the Group has historically been successful in raising equity funding for its exploration and appraisal programme, the Board has concluded that the proceeds from the Transaction will provide the Continuing Group with the financial flexibility to create greater shareholder value without short- to medium-term share issuance dilution.

The Continuing Group will be able to access cash holdings to continue development of the remaining discovered resource base and will continue to explore and develop the Continuing Group's significant existing prospective resource potential. Selective acquisitions of additional exploration licences through farm-ins or corporate transactions, as well as participation in upcoming government licensing rounds, will also be considered.

The Continuing Group retains interests in a number of assets offshore Tanzania, including the remaining stakes in Blocks 1, 3 and 4 and Block 7 and East Pande.

3 Information on Blocks 1, 3 and 4 and the Midstream Companies

Overview of Blocks 1, 3 and 4

Blocks 1, 3 and 4 cover a large area of acreage in the Ruvuma and Mafia Deep Basins area (20,853km2), located offshore Tanzania in water depths ranging from approximately 100 metres to 3,000 metres.

The shallow water and onshore extensions of these basins have only seen limited exploration which has resulted in two commercial gas developments (Songo Songo and Mnazi Bay), which currently supply gas to local markets. The results of the Group's drilling activity in Blocks 1, 3 and 4 have confirmed the presence of both Tertiary and Cretaceous reservoir systems. Interpretation of seismic data acquired on these blocks suggests the reservoir systems were derived from the Ruvuma Delta system in the south and the Rufiji Delta system in the north. All fourteen wells drilled in Blocks 1, 3 and 4 have encountered gas within Tertiary and/or Cretaceous reservoirs. Appraisal drilling on the discoveries made in Blocks 1, 3 and 4 and successful drill stem tests, which have all delivered commercial gas flow rates in Jodari-1, Mzia-2 and most recently Pweza-3, have successfully confirmed the extent of the fields and significantly de-risked resource estimates. The Group's drilling results to date have demonstrated that the basins in southern Tanzania contain significant quantities of gas, enough to justify commercial development.

Licence and operatorship

Ophir Tanzania (Block 1), a wholly-owned subsidiary of Ophir (incorporated in Jersey), currently holds a 40 per cent. participating interest share in each of Blocks 1, 3 and 4, subject to the back-in rights of TPDC, in accordance with the Blocks 1, 3 and 4 PSAs. The remaining 60 per cent. participating interest share in each of Blocks 1, 3 and 4 is held by the BG Group, subject to the back-in rights of TPDC.

The table below summarises details of each of the blocks and the existing ownership interest of the Group and the BG Group in them (prior to any exercise by TPDC of its back-in rights):

If TPDC exercises its back-in right under each of Blocks 1, 3 and 4, the participating interest of the Group and the BG Group shall be reduced to 35.2 per cent. and 52.8 per cent. respectively. This back-in right can be exercised at any time. If, in respect of Blocks 3 and 4, TPDC exercises its further back-in right of 3 per cent, the participating interest of the Group and the BG Group shall be reduced to 34.0 per cent. and 51.0 per cent. respectively. This further back-in right is exercisable within 12 months of a declaration of commerciality.

Following the completion of the initial 2012 drilling campaign, the parties pay their own share of exploration and appraisal costs in proportion to their participating interest share.

Commercialisation and the Midstream Companies

On 26 May 2010, the Group entered into a suite of agreements with the Tanzanian State and TPDC granting it the rights to develop, build, own and operate the infrastructure required to exploit any discovery of natural gas in any of Blocks 1, 3 or 4. The agreements also grant the right to export and sell any recovered gas (converted to LNG or other gas products) into the international market. The suite of documents include an implementation agreement relating to all of Blocks 1, 3 and 4 and an addendum to each of the PSAs relating to Blocks 1, 3 and 4 which incorporate gas terms.

The Group currently holds a 35.2 per cent. interest in each of:

· Ruvuma, which is responsible for developing, owning and operating the pipelines for the transportation of gas produced from Blocks 1, 3 and 4;

· Mzalendo, which is responsible for developing, owning and operating the plant required for the treatment, conditioning, synthesising, refining, processing, separating or conversion of natural gas produced from Blocks 1, 3 and 4; and

· Fahari, which is responsible for gas marketing activities in respect of gas produced from Blocks 1, 3 and 4, including securing consents, marketing, purchasing, selling and trading such gas on the international export market.

David Bishopp, Andrew Day, Derek George, Ian Hudson and Yona Killagane are currently directors of Fahari, Mzalendo and Ruvuma.

4 Financial information relating to the Sale Assets

As at 31 December 2012, the gross assets attributable to the Group's interest in Blocks 1, 3 and 4 in the accounts of Ophir Tanzania (Block 1), the holder of such interests, was US$300.7 million and no profit or loss was recorded for the year ended 31 December 2012 attributable to Blocks 1, 3 and 4 in the accounts of Ophir Tanzania (Block 1). The financial information set out in this paragraph has been extracted without material adjustment from Ophir Tanzania (Block 1)'s audited financial statements as at and for the year ended 31 December 2012.

As at 31 December 2012, Fahari, Mzalendo and Ruvuma had de minimis gross assets of less than US$1,000 each reflecting subscriber share capital and did not record any profit or loss for the year ended 31 December 2012.

The Continuing Group is likely to incur a tax cost in Tanzania as a result of the Transaction. The amount of this liability will be determined following negotiations with the relevant taxation authority in Tanzania and it is not yet possible to confirm the amount of such liability.

5 Use of proceeds

The Group intends to use existing cash resources to:

· continue to explore and evaluate the resource potential of the Group's operated acreage position in Tanzania through a deep water offshore exploration drilling programme in Block 7 and East Pande;

· commence a multi-well offshore drilling programme in Gabon;

· undertake further exploration activities on Block L9, offshore Kenya; and

· undertake further pre-development studies as well as exploration and appraisal of its resource base in Block R, Equatorial Guinea including the deeper potential liquids play.

The Group intends to use the aggregate net proceeds of the Transaction to continue the Group's strategy of adding significant value across its portfolio through a combination of:

· acquiring further seismic data across its licences in Gabon, targeting the deep water oil plays analogous to those successfully tested in the Sergipe-Alagoas Basin in the conjugate margin offshore Brazil, with a view to drilling in future years;

· accelerating appraisal and exploration activities, including drilling and further seismic acquisition, in the event of drilling success on any of the new plays targeted in Tanzania, Gabon, Equatorial Guinea and Kenya;

· progressing Ophir and BG Group's Tanzanian gas assets towards commercialisation in a competitive timeframe and continuing to explore for additional resource in Blocks 1, 3 and 4;

· completing the acquisition of additional assets through ongoing licensing rounds including those already announced in Tanzania and Gabon and by pursuing exploration farm-in opportunities; and

· adding to the Group's portfolio through one or more new country entries that leverage the Group's expertise.

6 Summary of the terms of the Transaction

A Farm-Out Agreement has been entered into between Ophir Tanzania (Block 1), Ophir Pipeline, Ophir LNG and Ophir Gas Marketing (the "Sellers") and Pavilion Energy pursuant to which the Sellers have agreed to sell an undivided 20 per cent. legal and beneficial interest in and under the Blocks 1, 3 and 4 PSAs and a corresponding proportion of the rights, obligations and liabilities under the Blocks 1, 3 and 4 JOAs together with 17.6 per cent. of the issued ordinary share capital of each of the Midstream Companies.

The consideration payable under the Farm-Out Agreement for the Sale Assets is approximately US$1,288 million which shall be satisfied in cash. This amount comprises of US$1,250 million on Completion (the "Completion Payment") and, following the final investment decision having been reached by all holders of interests in Blocks 1, 3 and 4 in respect of the gas export project in respect of natural gas discoveries in Blocks 1, 3 and 4 and associated infrastructure in respect of Blocks 1, 3 and 4, an additional US$38 million. Interest shall accrue on the Completion Payment for the period from 1 January 2014 to Completion.

Pavilion Energy shall also reimburse the Sellers in respect of their pro rata share of expenditure incurred in respect of Blocks 1, 3 and 4 between 1 January 2014 and Completion, together with interest accrued on such expenditure and subject to certain adjustments.

Completion of the Transaction is conditional upon, among others: (i) written consent to the Transaction from the Tanzanian State; (ii) written consent to the Transaction from the BG Group; (iii) the waiver or non-exercise by the BG Group of each of its Pre-Emption Rights; (iv) clearance from the FCC; and (v) the approval of the Transaction by Ophir's Shareholders.

Following completion of the Transaction, the Group will hold a 20 per cent. participating share in each of Blocks 1, 3 and 4, subject to the back-in rights of TPDC.

7 The BG Group's Pre-Emption Rights in respect of the Farm-Out Interest and corresponding sale of Sale Shares to the BG Group

The Blocks 1, 3 and 4 JOAs (when taken together with the Blocks 1, 3 and 4 PSAs) set out the Group's and the BG Group's rights and obligations in respect of the operations under the Blocks 1, 3 and 4 PSAs. The Blocks 1, 3 and 4 JOAs each give the BG Group a right of pre-emption in connection with the proposed transaction. The BG Group has the right to notify the Group of its intention to acquire the Sale Assets on the same terms and conditions as agreed with Pavilion Energy within 30 days of being notified of the Transaction (any such acquisition being conditional on the sale of all the Sale Assets).

If the BG Group exercises its Pre-Emption Rights in respect of each of Blocks 1, 3 and 4, upon completion of the transfer of the Sale Assets, the Group will hold a 20 per cent. participating interest share in each of Blocks 1, 3 and 4 and the remaining 80 per cent. participating interest share in each of Blocks 1, 3 and 4 will be held by the BG Group, in each case subject to the back-in rights of TPDC.

8 General meeting and expected timetable to Completion

Completion of the Transaction is conditional upon Shareholders' approval being obtained at a general meeting of the Company. A circular setting out further details of the Transaction, together with the notice to convene the general meeting and the form of proxy for use at the general meeting, will be posted to Shareholders in due course. The resolution will be proposed as an ordinary resolution that will be passed if a simple majority of the votes cast are in favour of the resolution.

Completion of the Transaction is expected to occur during the first quarter of 2014.

9 Definitions