Ophir Energy Plc, a U.K. explorer in Africa, fell the most since selling shares in London in July 2011 after announcing delays in drilling and exploration plans.
Ophir declined by 15 percent to 332 pence, valuing the company at less than 2 billion pounds ($3 billion). The explorer and BG Group Plc delayed their plans to start deepwater drilling off Tanzania in September. Ophir also postponed exploration plans in Gabon and Equatorial Guinea, and is studying its options in Ghana following unsuccessful drilling there.
“We’ve not stopped drilling,” Chief Executive Officer Nick Cooper told analysts today on a call. “People are acting as if we haven’t been drilling in the first half of the year. We’ve been drilling continuously.”
Ophir plans to drill 10 wells through 2014 in search of about 5 billion barrels of oil equivalent resources, according to a presentation by the London-based company.
It is seeking partners to share project costs in Gabon, Equatorial Guinea, Kenya and Tanzania, Cooper said. “We reset the clock in March and we recommenced negotiations pretty soon thereafter,” he said. “It’s a weak macro environment” for raising capital for exploration and production.
Ophir plans to begin drilling the Mlinzi well in Block 7 off Tanzania in the fourth quarter. It’s the company’s largest well in its campaign seeking about 3.5 billion barrels of resources and will cost about $100 million to drill, Cooper said. The company also plans to bid for exploration licenses in Myanmar to expand its reach beyond Africa, the CEO said.
The “much anticipated outboard well will not be drilled” by BG and Ophir in Block 1 off Tanzania until at least 2014, Alexander Holbourn, a Bank of America Corp. analyst, wrote in a report. “The latest 3D seismic data set over this area has failed to de-risk” the previously planned drilling target.
Ophir also reduced the size of the 1C prospect resources by 60 percent to 7.5 trillion cubic feet of gas, Holbourn wrote.
The company has been looking for a partner to share Block R development costs to supply fuel to a liquefied natural gas plant in Equatorial Guinea. It has been examining plans to use a floating LNG unit or build a new land-based facility near Marathon Oil Corp.’s Punta Europa plant on Bioko Island.
“The government is now behind floating LNG as a concept,” Cooper said. “Hopefully we can make some announcement” about the project “in the near term.”
Also in West Africa, the explorer and Brazil’s Petroleo Brasilero SA are looking for a rig to drill wells off Gabon next year. Petrobras in June agreed to form a joint venture with Grupo BTG Pactual SA to share drilling costs in the continent.
“We are now at the point where they are confident in the funding position,” Cooper said. “They are good to go.”
Ophir plans to invest about $400 million in projects this year. It recorded a first-quarter $19.4 million loss and $485.6 million of available cash in July, it said today in a statement.