LONDON (Alliance News) - Ophir Energy PLC said Monday the Equatorial Guinea Ministry of Mines & Hydrocarbons notified the company its Block R licence will not be extended after its expiry at the end of 2018.
The oil and gas explorer and producer said there will now no longer be an additional non-cash impairment of the asset, which contains the Fortuna gas discovery, in its full year results. The impairment still is expected to be around USD300 million.
"It is disappointing that the ministry has decided not to extend the licence, despite the amount of effort and cost dedicated to the delivery of the project and especially as we were still talking to highly credible potential co-investors. Nevertheless, we will continue to work constructively with the authorities in Equatorial Guinea. I should like to thank everyone in the Ophir project team; you gave this your very best endeavours," said Interim Chief Executive Officer Alan Booth.
Ophir said it will continue to focus on its southeast Asia assets.
Booth added: "Looking ahead, the group's cashflow, capital commitments and growth prospects will be focused in southeast Asia, where we have built a robust operating platform capable of delivering value to shareholders."
Shares in Ophir Energy were up 0.6% Monday at 45.05 pence each.
On Wednesday last week, Ophir confirmed it received a takeover offer from Jakarta-listed energy company PT Medco Energi Internasional Tbk.
The oil and gas company said Monday the discussions with Medco Energi took place with the "shared knowledge that there were a number of potential outcomes" over the Fortuna asset.
Ophir said the discussions "continue".
