Pavilion Energy’s transaction with Ophir to finance Tanzanian operations in 2015

Ophir Energy says its completion of the divestment of a 20% interest in Blocks 1, 3 and 4, Tanzania to Pavilion Energy for S$1.25 billion (pre-tax) with a further US$38 million payable on Final Investment Decision will help the company finance its operations in the country through to 2015.

Operations that Ophir will be going ahead in the second half of 2014 include its drilling programme and flow tests as well as work on the onshore Tanzanian LNG facility continues led by the Integrated Project Team.

Most of the company’s capital expenditure according to the interim half year results in 2015 will be approximately half the level of 2014, with the exploration focus shifting to seismic acquisition and interpretation.

“The highlight in the first half of 2014 was the completion of our transaction in Tanzania with Pavilion Energy. This was the culmination of several years of hard work by the Company and is testament to Ophir’s strategy of monetising exploration success in a timely manner. The proceeds from the deal leave the Company well financed through 2015,” says company chairman Nicholas Smith.

During the first half the company reports a net profit after tax of US$339.1 million reflecting the gain on sale of the Tanzanian stake to Pavilion Energy.

Ophir CEO Nick Cooper says the company will continue to focus on exploration as its future business model.

“Ophir’s model of finding and monetising resources through disciplined exploration continues along with progress in the maturation of our 830mmboe of net discovered resource towards monetisation. After a difficult period for Ophir and the independent E&P sector, capital expenditure will be reined back in 2015 as we position Ophir for the next phase of drilling. Exploration will remain central to Ophir’s future business model, but may over time be supported by more mature assets if these are in the best interests of shareholders.” He concluded.