OPHR.L Regulatory News (OPHR)

12th July 2018

Ophir Energy plc

("Ophir", the "Group" or the "Company")

Operations and Trading Update

Ophir provides the following update on its trading and operations for the six-month period ending 30 June 2018.

Alan Booth, Interim CEO of Ophir, commented:

"Since stepping in to the role of interim CEO, I have defined three clear and immediate priorities for our teams to deliver: 1) Continue to manage our existing production operations safely and efficiently; 2) Explore every avenue to create value from our Fortuna FLNG project; and 3) Complete the Santos acquisition and integrate these assets effectively and efficiently into our organisation.

"Each of these priorities is precisely aligned with our near term strategy to become a self-sustaining business. We will continue to rebalance our portfolio towards a stronger production base and higher cash flow generation in order to give ourselves a broader opportunity set no matter how the external environment evolves. The Santos assets grow and diversify our production base and mark an important step towards achieving cash flow sustainability.

"We are keen to continue to grow production and will remain alert to potential inorganic growth opportunities when they are consistent with our strategy. We are, of course, especially conscious that our Fortuna licence expires at the end of this year; however, we remain determined to deliver value both to our shareholders and the government of Equatorial Guinea.

"Our search for a new CEO is making good progress and a number of highly experienced and qualified external candidates have been identified. The Board will of course provide further updates as and when appropriate."

1 H 2018 Highlights:

· $205 million acquisition of Southeast Asian asset package from Santos which will materially increase production and cash flow

· Average production of 11,400 boepd, marginally ahead of expectations

· Revenue of $102 million and cash flow from production of $43 million

· We continued active discussions on partnering and financing of our Fortuna FLNG project with credible and well-financed third parties.

· Net cash of $75 million and gross liquidity (cash and undrawn debt facilities) at 30 June 2018 of $370 million

Portfolio Management/M&A

In early May, we announced an agreement to acquire a package of assets in Southeast Asia from Santos Limited. The principal assets are interests in the producing Chim Sao/Dua oil field in Vietnam, and the Madura Offshore and Sampang PSCs in Indonesia, which contain a number of producing gas fields. The transaction is consistent with our strategy of increasing our cash generation in order to bring forward Ophir's stated objective of being free cash flow positive and become a self-funding E&P company.

On a full year pro-forma basis for 2018, (assuming the acquisition was effective from 1 January 2018), we expect the transaction to add 13,500 boepd of production, which would take full year production on a proforma basis to 25,000 boepd, and add around $90 million of operating cash flow. 2018 full year pro forma capital expenditure (excluding the cost of acquisition) for the Santos assets is expected to be $25 million.

A Shareholder Circular is expected to be published later in the summer with an EGM expected to take place shortly thereafter.

Production & Development

Production during the first half of 2018 was above expectation at an average of 11,400 boepd.

Gross production at the Bualuang oil field was 7,800 bopd in the period. The Phase 4 development activities will commence in July with the arrival of a rig to drill three replacement production wells as well as to work over two existing wells. As a result, production in the second half is expected to average over 9,000 bopd.

Gross production from the Kerendan gas field averaged 17.2 MMscfd, broadly in line with expectations. In addition, we advanced discussions with the local regulator on a revised gas price for the existing GSA of $5.65 per mmbtu.

Gross production from the Sinphuhorm gas field was 77 MMscfd for the half-year, marginally ahead of expectations.

Throughout the first half of the year, we engaged in negotiations with potential lenders, but have not yet finalised a project finance solution for Fortuna FLNG. In May, OneLNG made the decision to dissolve itself. Although this decision was disappointing, we continue to believe that Fortuna is a high quality asset and, along with Golar, we are focused on trying to secure a new partner with the financial strength likely to be required to unlock the project financing.

The Block R licence (which contains the Fortuna gas discovery) is due to expire at the end of 2018. As already mentioned, we are in active discussions to secure a partner and the status of the financing and timing of FID will become clear in the coming months. Depending on how these discussions progress, the carrying value of the Block R licence ($604 million as at 31 Dec 2017) may need to be reassessed as part of our interim reporting process.

Exploration & Appraisal

During the first half of 2018, Ophir devoted attention to step out exploration from existing fields. As a result, the Bualuang North prospect was high graded for drilling in 2H 2018, at the end of our development drilling programme. The well is expected to cost less than $1.5 million on a post-tax basis and is targeting between one and five million barrels of prospective resources greater than 50% chance of success. In the event of success, the intention is to tie Bualuang North back to the existing production facilities and any discovery of over one million barrels is expected to payback in less than 18 months.

In Mexico, we secured two blocks, 10 and 12, in offshore bid round 2.4. These licences are in the Mexican Ridges and, in combination with Block 5 (Sureste basin), give us a broad, diversified acreage position.

In Equatorial Guinea, we were awarded Block EG-24 in the licensing round completed earlier in 2018. We subsequently farmed out 40% of the equity to Kosmos Energy who in return will shoot a block wide 3D seismic survey, for which Ophir is fully cost carried, and partially carry the costs of a well if a decision to drill is made. The 3D survey commenced in May and is 28% complete.

In Myanmar, we completed (subject to government approval) a cross assignment with Chevron that will see Ophir have a 42% interest in both blocks AD-03 and A-5. We expect to make a decision on our further involvement in these licences before year-end.

Financial Update

Revenue for 1H 2018 is forecast at $102 million, with higher than forecast commodity prices, with Bualuang production realising $66.62/bbl and Kerendan gas $5.38/Mscf. Additionally, the Sinphuhorm field generated $1.8 million of net investment income (at an average gas price of $5.20/Mscf).

Cash flow from production in 1H 2018 is forecast to be $43 million and a full year forecast, on a pro forma basis including the assets being acquired from Santos, of $190 million. Capital expenditure for 1H 2018 is forecast at $47 million. Capital expenditure for the full year 2018, on a pro forma basis including the assets being acquired from Santos, is forecast at $145 million. The revised capex forecast assumes the commencement of any Fortuna related spend will be deferred until 2019 but includes expenditure on Bualuang Charlie development and preparations for drilling in Block 5, Mexico.

Following the acquisition of Santos, year-end 2018 net debt forecast is revised to $135 million with year end gross liquidity (cash and undrawn debt facilities) remaining strong, even allowing for the acquisition of the Santos assets, expected to be $280 million.

Capital expenditure has been reduced by $30m against previous guidance, predominately with the deferral of Fortuna spend to 2019.

*guidance on a 2018 FY pro forma basis assuming accounting for the Santos acquisition from the effective date of 1 January.2018. Our current forecast is that the transaction will completed in 3Q'18 and the full year financial results will reflect acquisition accounting from that completion date

For further enquiries, please contact:

Ophir Energy plc + 44 (0) 20 7811 2400

Geoff Callow, Head of IR and Corporate Communications

Brunswick (PR Adviser to Ophir) +44 (0)20 7404 5959

Patrick Handley

Wendel Verbeek