OPHR.L Regulatory News (OPHR)

Type

Risk

Description of risk

Control

Responsibility

Change

External

Legal

compliance

regulatory or

litigation

· The Group conducts business in jurisdictions with inherent risks relating to fraud, bribery and corruption.

· Litigation against the Group could materially impact its business.

· Reputational damage - withdrawal of support by shareholders, governments, lenders and partners.

· Investigation could lead to significant business disruption.

· Loss of assets, PSCs and projects.

· The Group accords the highest importance to corporate governance matters and upholding the highest ethical standards.

· The Group employs suitably experienced and qualified staff and, when required, external advisors to ensure full compliance.

· Legal risk assessment and due diligence is undertaken as appropriate.

· Robust Code of Conduct and Anti-Corruption policies and standards.

General Counsel

No change

Capital

Constraints

and adverse

market

sentiment

towards the

E&P sector

· Depressed sector.

· Significant competition for development funds.

· Market questioning the value equation for upstream, seeing high finding costs and only rare examples of companies monetising their discoveries, promptly and for a profitable price.

· Impact on project value and modelling.

· Maintain cash balance to sustain business through reduction in LNG capex.

· Aim to internally fund core exploration and appraisal activities from the addition of production assets and monetisation of resources to generate cash flow.

· Diversify the sources of funding and apply prudent levels of debt to development and production activities.

· Ensure that commercial terms on new acreage reflect the changing landscape and involve minimal financial commitments with options to exit early.

· Refocus Ophir's upstream model and how to create value as follows:

o assets will only continue to be held and progressed if they can demonstrably create substantial value for shareholders. Capital is being selectively directed at those assets which offer the highest risk-weighted returns.

o we have reorganised to maximise the impact of our technical professionals and to minimise our support activities.

Chief Financial Officer

UP

Political

· The Group operates in jurisdictions that are subject to significant political, economic, legal, regulatory and social uncertainties.

· Dependence on permits and consents granted by the authorities where we operate can lead to delays and increased costs in obtaining necessary permits.

· Uncertainties in the interpretation and application of laws and regulations in the jurisdictions in which we operate.

· Ophir regularly monitors and seeks to understand changes taking place in political and regulatory environments and the potential for unforeseen events.

· The Group works to the highest industry standards with regulators, closely monitoring compliance with the Group's licence and PSC obligations.

· Spread our portfolio/regional exposure.

· Maintain positive relationships with governments and key stakeholders in host countries.

· All material information is released to the market on a timely basis and in accordance with all applicable regulations.

Director Security

and Surface Risk

UP

Stakeholder

sentiment

· Actual or perceived failure to address social and environmental issues or corporate responsibility matters may adversely affect the Group.

· Ophir is committed to a shared value approach to ensure sustainable development with its stakeholders.

· The Group conducts its operations in an ethical, responsible, apolitical and transparent manner.

· Ophir places a strong emphasis on maintaining excellent relationships with the local communities and host country governments.

· There is ongoing monitoring of public sentiment towards the Group and its operations.

Director Security

and Surface Risk

UP

Global

economic

volatility

· Numerous and complex changes in macro environment around global affairs and international economics, e.g. China's slowdown and deceleration in the growth of global trade, are contributing to uncertainty and higher market volatility.

· Regularly review how external risks impact the Group's strategy and remain agile to change.

· Act counter-cyclically to take advantage of the opportunities developing from the industry downturn

Director Portfolio and Strategy

UP

Low

commodity

price

· Continued supply and demand concerns.

· 'Lower for Longer'.

· Continue to review the Group's cost structure and make sure it reflects the new oil price environment.

· Economics of development plans re-worked to reflect low oil price environment.

· Selectively exploit the low service costs that have resulted from the drop in the oil price.

Chief

Financial Officer

UP

Strategic

Divestment

· Difficult divestment environment

· Inability to successfully divest assets at an acceptable price and/or time

· Management restructuring designed to provide greater focus on IRR when making investment decisions.

· Monitor and tailor projects to fit macro environment.

· Facilitate buyer access /relationship with host Government.

· Maximise transparency with equity buyers.

· Contingency planning and preparedness to change the course of action as situations change.

Director Portfolio

and Strategy

UP

Investment

decisions

· The Group may not be able to identify appropriate expansion opportunities or be able to manage such expansion effectively

· Investments are not dictated by production or reserves growth targets; instead each investment will be assessed on an IRR and materiality basis.

· Focus on growing a revenue generating business to fund exploration activities and minimise the overall cost of capital.

· Allocate capital to highest return opportunities following rigorous risk reward analysis.

· Risk assessment and due diligence process is undertaken on all potential new country entries.

· Ophir endeavours to transact at the most appropriate time to create value for shareholders.

Director Africa

Global New

Ventures/

Director Asia

Down

Operational

Health

Safety and

Environment

(HSE) and

Security

incident

· Oil and gas exploration, development and production can involve numerous risks and hazards, the most significant for Ophir are loss of hydrocarbon containment and the transportation of staff

· Ophir is committed to maintaining robust health, safety, security and environmental management, and procedures are in place in order to respond to unexpected events that have a direct impact on the Group and the communities in which it works.

· Comprehensive HSE and operations management systems including emergency response and oil spill response capability, as well as maintaining asset integrity.

· Active security monitoring and management.

· Learning from Group and third-party incidents.

· Introduction of leading indicator system.

· The contracting and procurement process ensures suitably qualified contractors are employed and trained in Ophir's requirements and industry best practices.

Director Security

and Surface Risk

No change

Commercial

· Discovery risk and success rate

· Ophir has rebuilt its exploration portfolio in Africa and Asia with

high quality operated positions where Ophir has competitive

advantage, where drilling commitments are minimised and where the fiscal regime allows material value creation at current prices

· This approach enables Ophir to manage the exploration risk by high grading plays in prospective acreage; this focuses attention (and ultimately drilling) solely on the most prospective plays

· Ophir is carefully and counter-cyclically building a portfolio of lowcost opportunities with defined exit options for investors in order to decide whether or not to progress to the next phase of exploration

· Technical Advisory Committee and peer reviews

· Appropriate balance between growth by exploration and acquisition

· Report on finding costs

· Measuring value of exploration investments

· Application of technical excellence and use of appropriate technologies in exploration methodologies

· Review new geographic opportunities without impacting focus on strategic core growth areas

· Managing risk with partners in existing assets and new ventures

Director

Commercial/

Director

Subsurface

Down

Financial

Inability

to fund

exploration

work

programmes

· Liquidity and inability to deliver the business plan

· Gas discoveries may require the Group to invest in LNG development projects which require long lead times and material investment in receipt, processing and transportation infrastructure and the marketing of LNG

· The Group's business will require significant capital expenditure and the future expansion and development of its business could require future debt and equity financing. The future availability of such funding is not certain

· Revenues, profitability and cash flows concentrated in a small number of producing assets

· The Group may face the possibility of future decommissioning costs that it cannot accurately predict

· Regular review of cash flow, working capital and funding

options, and prudent approach to budgeting and planning,

to ensure sufficient capital to meet commitments

· Effective portfolio management via farm outs /asset sales as appropriate

· Budget focused on high and medium ranked assets /projects to deliver value creation and to ensure the Group can live within its means

· A formalised annual budget process and ongoing monthly reviews and analysis of actuals

· Board approval of Annual Work Programme

Chief Financial Officer

Up