Ophir Cuts Debt, No Word on LNG Talks

UK-listed Ophir Energy has increased and extended its debt facility, thus expecting to reduce year-end debt, but gave no update on financing of its Fortuna floating LNG project.

The company said December 12 that it has increased its existing reserve-based lending facility (RBL) by $100mn to $350mn and extended its maturity by 18 months, to now mature on December 31 2025, restoring the original seven-year maturity. Lending banks are as before. 

The revised RBL will be secured against Ophir’s producing assets in Southeast Asia, including the Chim Sao oil field in Vietnam (where Premier is a partner) and the Madura and Sampang gas licences in Indonesia that were newly-acquired from Santos. Proceeds from the increased RBL will repay the 18-month bridging loan that Ophir signed in August to partly fund its deal with Santos. Ophir’s CFO Tony Rouse said: "Our balance sheet remains strong and we expect to have greater liquidity at year end than previously guided." It now expects to end the year with net debt of $65mn, versus its previous guidance of $110mn.

However, Ophir provided no update of its plan, announced September, to divest all or part of its LNG assets, including its operating stake in the undeveloped Fortuna floating LNG offshore Equatorial Guinea and a 20% interest in Shell-operated undeveloped gas reserves offshore Tanzania. The Equatorial Guinean government said in May that a final investment decision (FID) in Fortuna was required by end-2018 or the project could be handed to another developer or even scrapped; on December 11 its press agency released a list of 2019 investments that omitted any mention of Fortuna.

Ophir has repeatedly deferred its target FID since 2016; some Chinese banks early in 2018 were reportedly willing to lend but insisted on Chinese content, which conflicting with Ophir's plans.