Ophir on track for FID on Fortuna FLNG project

Ophir Energy plc intends to make a final investment decision (FID) on the Fortuna FLNG project later this year, the company reported in its full-year 2015 results.

The company holds the operatorship stake of the deepwater project, located on the Block R license offshore Equatorial Guinea in the southeastern part of the Niger Delta complex. Ophir said it estimates the Fortuna development to have 3.7 Tcf of recoverable resources with an annualized daily average of more than 330 MMscf/d.  

In advance of the FID, Ophir plans to reduce general and administrative (G&A) costs by an additional 15% in 2016. These reductions will be on top of the $60 million, or 37%, Ophir carved out of its G&A cost base in in 2015. It also reported a 70% drop on CAPEX spend in 2015 over 2014, and said it reduced its 2016 forecast by $150–200 million.  

It also completed its acquisition of Salamander Energy in 2015.

Ophir said that Fortuna FLNG is funded through its planned first production in mid-2019, with the company using project equity as a source of funding. It also discussed its financial outlook over the three-year period to first gas, noting its “high degree of financial flexibility,” with a cash balance (as of Jan. 1) of $614 million vs. the $210 million that Ophir has committed to spend over 2016–2019.

The company also disclosed that, in 2015, agreements had been signed with seven buyers and that gas fiscal terms were agreed upon with the government of Equatorial Guinea. The project's front-end engineering and design was also under way, with 50% completed last December.   

In discussing the development, Ophir said that Fortuna, located in a water depth of about 1,800 meters (5,905 feet) will be a four-phase development with a total of 17 wells; four developmental wells are planned for first gas.

Gas from subsea wells will travel through gathering flowlines, manifolds, and flexible risers to the external turret of the vessel. The Gandria FLNG vessel, a converted Moss LNG carrier, will be owned, operated, and maintained by Golar LNG. A second FLNG vessel is also planned to be onsite by 2025. Both have a planned LNG capacity of 2.2 MMtpa.  

One of Ophir’s stated goals for 2016 was to close its transaction with Schlumberger, which would give the service company a 40% interest in the Fortuna FLNG project. Currently, Ophir has an 80% operated interest in Fortuna. Partner GEPetrol holds 20%.

CEO Nick Cooper said, “Our strong balance sheet and net cash position, plus our low forward committed CAPEX, provide Ophir with greater financial flexibility than we have ever enjoyed. We can now confidently look forward four years, to first gas and revenues from the Fortuna FLNG project, knowing that we are fully funded.”

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