Any illusions that Ophir Energy (OPHR) might one day see production from its Fortuna development evaporated with the publication of these half-year figures. Although the group still has its licence to the liquefied natural gas project offshore Equatorial Guinea, the asset has been impaired by $310m (£239m) to just $300m. A buyer is sought, although the company admits to "uncertainty around the value we can ultimately realise".
In other words, there is a good chance the remaining $300m will be written-off by the year end, when Ophir’s licence expires. Following Schlumberger’s withdrawal from the venture, and a lack of funding to date, hopes for a white knight seem overly hopeful; as Ophir states in these figures, "once we reach an outcome, a further impairment may be required".
The latest face-saving push is to double down on production in Southeast Asia, where the company recently acquired a portfolio of cash-generating fields from Santos for a headline consideration of $205m. A strategic update, released with these numbers, also pledges big cuts to the London office and frontier exploration, and a shift in headquarters to Asia.
Prior to the strategic update, consensus forecasts were for adjusted earnings per share of 1¢ this year, and 9¢ in 2019.
OPHIR ENERGY (OPHR) | ||||
ORD PRICE: | 38.3p | MARKET VALUE: | £270m | |
TOUCH: | 38.2-38.5p | 12-MONTH HIGH: | 78p | LOW: 36p |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 154¢ | NET CASH: | $75.3m |
Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
2017 | 88.3 | -45.6 | -12.0 | nil |
2018 | 102 | -341 | -53.1 | nil |
% change | +16 | - | - | - |
Ex-div: | na | |||
Payment: | na | |||
£1=$1.30 |