OPHR.L Regulatory News (OPHR)

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Proposed acquisition of certain Southeast Asian producing and exploration assets from Santos Limited

Publication of Circular and Notice of General Meeting

Further to the announcement by Ophir on 3 May 2018 relating to the proposed acquisition of a package of Southeast Asian assets from Santos Limited, an Australian listed Oil & Gas company, for an aggregate cash consideration of $205 million pre-working capital adjustments, subject to certain approvals (the "Transaction"), Ophir announces that the UK Listing Authority has today approved a class 1 circular in relation to the Transaction (the "Circular").

The Chairman's Letter within the Circular contains the following information on the Background to and reasons for the Transaction:

"Over recent years, against a challenging backdrop for the sector, Ophir has taken a number of steps to deliver against its strategy including:

· increasing the focus on Ophir's cash generative production and development assets and maximising and expanding the cash flows from that portfolio;

· refocusing exploration into a smaller number of lower-risk near-field opportunities that tie back to existing infrastructure, where Ophir is most confident of being able to monetise discoveries in a shorter time frame (e.g. infield opportunities in the Bualuang field, Thailand and the Kerendan field, Indonesia), alongside the selective acquisition of new acreage in particularly attractive areas (e.g. underexplored world-class petroleum systems, offshore Mexico);

· pursuing opportunities to monetise contingent resources through asset development, farm-out or divestment;

· undertaking a significant cost reduction programme, including reductions to the London head office organisation and executive teams; and

· deploying capital and manpower in a disciplined manner where Ophir sees the greatest risk-adjusted opportunity for returns.

The Board believes that the Transaction represents an attractive next step in this strategy, adding a portfolio of high quality production and development assets‎ that will further enhance the cash flow characteristics of the Group. Furthermore, the Board believes that the Transaction offers a number of opportunities to create significant value for Shareholders including:

· through the addition of a balanced and complementary portfolio of low cost, highly cash generative Producing Assets in Southeast Asia, a region where Ophir already has producing assets;

· through increased scale and stability of cashflows. The Transaction is forecast to increase the Group's 2P reserves by over 40% from 49.4 MMboe to 70.4 MMboe. Forecast production and funds flow for the Enlarged Group for the year ending 31 December 2018 on a full year pro forma basis (assuming the acquisition was effective from 1 January 2018) will increase to c.25,000 boepd (including c.13,500 boepd from the Producing Assets) and US$190 million, respectively;

· through significant near-term development opportunities (e.g. the Meliwis gas field development in Indonesia), alongside production life extensions utilising strategic infrastructure positions;

· through economies of scale in operating expenditures, general and administration expenses and greater financing efficiencies. The Board expects the Enlarged Group to benefit from material cost synergies arising as a result of the Transaction, principally through the combination of the Group's existing Indonesian assets with the Indonesian assets being acquired from Santos. In aggregate, synergies are estimated to be at least US$13 million per annum (pre-costs of realising the synergies); and

· through the deployment of its significant technical expertise and wide ranging regional experience, adding value to the assets via delivering on upside potential where the Group will be operator, or working with project partners where it will not be the operator to drive value creation."

As part of the financing for the Transaction Ophir has signed an acquisition bridge facility of up to $130 million which it expects to refinance into its existing Reserve Based Lending facility in due course. Further details can be found in Part VI of the Circular.

Ophir shareholders (other than those who have elected for notification by website) will shortly receive, amongst other documents, a copy of the Circular which contains a notice of the General Meeting at which Ophir shareholders will be asked to vote on the resolutions required to approve the Transaction. As set out in the Circular, the General Meeting will be held on Monday 20 August 2018 at 12:00 p.m. at the offices of Linklaters LLP at One Silk Street, London, EC2Y 8HQ. The resolutions will require approval by a simple majority of the Ophir shareholders present and voting (in person or by proxy) at the General Meeting.

Completion of the Transaction is conditional upon approval of the Transaction by Ophir shareholders at the General Meeting. Completion in respect of the Exploration Assets is also conditional upon, amongst other things, regulatory and certain partner consents, and their respective pre-emption regimes.

The timetable of principal events in relation to the Transaction is as set out below. If any of the key dates set out in the expected timetable change, an announcement will be made via a Regulatory Information Service.

Copies of the Circular are available for inspection on Ophir's website at http://www.ophir-energy.com/ or can be inspected at the offices of Ophir, Level Four, 123 Victoria Street, London SW1E 6DE and the offices of Linklaters LLP, One Silk Street, London, EC2Y 8HQ during normal business hours on any weekday (excluding Saturdays, Sundays and public holidays) from the date of this announcement until the conclusion of the General Meeting and also at the place of the General Meeting from 9.00 a.m. on the day of the General Meeting until the conclusion thereof. Copies of the Circular will also be submitted to the National Storage Mechanism, where they will be available for inspection at www.morningstar.co.uk/uk/NSM.

Capitalised terms not otherwise defined in this announcement shall have the meaning given to them in the Circular.

Important Notice

This announcement is for information purposes only is not intended to and does not constitute a circular or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or any other securities, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.

Merrill Lynch International, a subsidiary of Bank of America Corporation, is acting exclusively for Ophir in connection with the acquisition and for no one else and will not be responsible to anyone other than Ophir for providing the protections afforded to its clients or for providing advice in relation to the acquisition.

Barclays Bank PLC, acting through its Investment Bank, which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Ophir and no one else in connection with the Transaction and will not be responsible to anyone other than Ophir for providing the protections afforded to clients of Barclays nor for providing advice in relation to the Ophir or any other matter referred to in this announcement.

This announcement includes forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond Ophir's control and all of which are based on the Directors' current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "believe", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "continues", "assumes", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors or Ophir concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and distribution policy of Ophir and the industry in which it operates.

These forward-looking statements and other statements contained in this announcement regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing Ophir. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. Such forward-looking statements contained in this announcement speak only as of the date of this announcement. Ophir expressly disclaims any obligation or undertaking to update the forward-looking statements contained in this announcement to reflect any change in their expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules or the Disclosure Guidance and Transparency Rules of the FCA or the Market Abuse Regulation.