LONDON (Alliance News) - Ophir Energy PLC swung to a profit for the first half on Thursday, boosted by the sale of its stake in three blocks in Tanzania to Pavilion Energy PLC, which will leave the company well financed into 2015, while it also said it would launch a share buyback of up to USD100 million.
The Africa-focused oil and gas firm said pretax profit in the six months to June 30 was USD589.4 million, up from the USD19.4 million loss posted a year ago. That was primarily driven by the sale of its 20% interest in Blocks 1, 3 and 4 at the Taachui project in Tanzania to Singapore's Pavilion Energy for USD1.25 billion. A further USD38 million is payable on the final investment decision.
The Ophir board also approved a share buyback programme of up to USD100 million. The company said the move had been made after it had assessed near-term capital needs and the discount the company's shares are trading at in relation to the underlying core value of its asset base.
Ophir said it drilled four exploration wells in the first half, with one discovery - at the Taachui project in Tanzania - and three dry holes. The three dry wells were drilled offshore Gabon and all three were commercially unsuccessful, though Ophir said costs were kept under control by carries from its partners on the project, Brazilian state oil company PetrÓleo Brasileiro SA, known as Petrobras, and OMV, the Austria-based oil and gas firm.
The company said the exploration and appraisal programme for three wells in its floating liquefied natural gas project in Equatorial Guinea are underway and said it has made progress on its LNG project in Tanzania.
"The highlight in the first half of 2014 was the completion of our transaction in Tanzania with Pavilion Energy. This was the culmination of several years of hard work by the company and is testament to Ophir's strategy of monetising exploration success in a timely manner," said Ophir Chairman Nicholas Smith.
"The proceeds from the deal leave the company well financed through 2015. After assessing our near-term capital needs and, in the opinion of the board, with our shares trading below the core value of the business, a capital return to shareholders has been approved via a share buyback programme announced today," Smith added.
Ophir Energy shares were up 3.4% at 205.30 pence early Thursday.