Ophir Energy (OPHR) increased its full-year production guidance and has taken an axe to costs, but revenue at the half-year mark came in below consensus and the driller swung to an $111m (£71m) operating loss. Ophir is a very different beast from a year ago, following the acquisition of Salamander Energy. It's a shame the enlarged group has to focus on re-jigging its business model to take account of reduced assumptions on the oil price.
Year-on-year comparables are largely meaningless as 2014 half-year earnings were buoyed by $673m in proceeds from the sale of Ophir's interest in Tanzanian offshore assets. The latest half-year numbers were also hit by $74m in impairments on exploration blocks in Kenya and Gabon.
The all-share deal to acquire Salamander was completed in March. Management said the group had already achieved substantial cost synergies through the deal, which allowed Ophir to gain access to a highly promising exploration platform in Indonesia. But the slump in crude oil prices has forced a rethink of capital commitments; the total spend for this year has been reduced by over 50 per cent to a forecast $250m-$300m. The group also paid down just over a third of the $503m of debt it inherited as part of the Salamander transaction.
Prior to these figures, broker Investec Securities gave an adjusted full-year EPS forecast of 14.6¢, against 18.7¢ in 2014.
OPHIR ENERGY (OPHR) | ||||
---|---|---|---|---|
ORD PRICE: | 111p | MARKET VALUE: | £864m | |
TOUCH: | 110-111p | 12-MONTH HIGH: | 256p | LOW: 104p |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 235¢ | NET CASH: | $392m |
Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
---|---|---|---|---|
2014 | nil | 589 | 33.70 | nil |
2015 | 86.5 | -123 | -12.70 | nil |
% change | - | - | - | - |
£1=$1.56 |