LONDON (Alliance News) - Shares in Ophir Energy were down 22% shortly after market open Friday after it said that talks with Schlumberger Ltd over the Fortuna floating liquefied natural gas project in Equatorial Guinea have been terminated.
Ophir said that despite Schlumberger completing technical due diligence, the two companies were unable to complete the transaction on terms agreed in the heads of terms, and as such, talks between the two were terminated.
In January, the company had struck a deal for Schlumberger to take a 40% stake in the Fortuna project as its upstream partner. Ophir currently has an 80% working interest in Fortuna.
Ophir reiterated Friday that Fortuna "still represents a technically and financially attractive project for Ophir and its shareholders" and said it continues to progress the project.
The company remains in "active discussions" with a number of other parties in regards to participation in and funding of Fortuna, it said.
It now expects to make its final investment decision in the fourth quarter of 2016, with first gas now forecast for early 2020.
"The Fortuna project workstreams are progressing towards Final Investment Decision. We have been reviewing a number of options and our discussions continue with other quality counterparties that can offer an attractive source of funding. In addition, the reduction in the capex to first gas has lowered the project breakeven oil price to approximately USD40 per barrel," said Chief Executive Officer Nick Cooper in a statement.
Shares in Ophir were down 22% at 71.45 pence Friday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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