Orphir Energy silent on funding update

FTSE-250 oil and gas explorer Orphir Energy issued a third quarter update covering its activities in Kenya, Tanzania, Gabon and Equatorial Guinea but provided no news of an anticipated fundraising.

The company needs to raise funds in order to finance its extensive exploration programmes and it had been expected that it might reveal details of how it would do this.

There are three possible options: selling assets, a 'farm down' (selling a percentage stake in a particular licence) or a placing.

Rumours have circulated that is most likely to 'farm down' its gas find in Tanzania, as development of this will require partnership with a gas production company, most likely a gas giant.

Nick Cooper, Chief Executive Officer of Ophir Energy, said: "Ophir has made significant progress in the past quarter. In Tanzania, recent well results and new seismic coverage have identified new, game-changing prospectivity. Mapping of Blocks 1 and 7 is on-going, with significant new prospects mapped within recent weeks. In Equatorial Guinea we have increased our gas resource and are now targeting a single train of liquefied natural gas supplied by Block R gas."

He added: "We are excited about our upcoming 2013 exploration programme. The continued processing and interpretation of the large volume of 3D seismic data Ophir acquired in 2012, combined with the 12-15 well drilling programme targeting net risked prospective resource of 1.0 billion barrels of oil equivalent has the potential to make 2013 another transformational year."

Among the most significant updates, it revealed that drilling is ahead of schedule at Jodari South-1 in Tanzania and said that while it has completed its seismic programme in Kenya and is 30% through the Tanzanian one.

Broker commentIn a brief note Oriel Secturities commented: "Our current valuation for Ophir shows a two train liquefied natural gas project in Tanzania is worth 604p a share with a further 158p a share for a single train development in Equatorial Guinea. Our risked expected monetary value for the exploration programme is 296p a share."

CM