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Ophir enters Indonesia and grabs major offshore acreage with Niko acquisition

27th October 2014

Ophir Energy has entered into an agreement with Niko Resources to acquire interests in seven deepwater Production Sharing Contracts (PSCs) in Indonesia, diversifying its predominately Africa-focused portfolio

Ophir grabs massive acreage offshore Indonesia with Niko acquisition
Post completion, Ophir will be a leading deepwater exploration acreage holder in Indonesia and the transaction will increase the company's total gross licensed acreage by 40 per cent

Ophir is acquiring seven PSCs with equity interests ranging from 18.5-100 per cent, six of which will be operated positions, with partners including Statoil and Eni.

In total, the acreage covered by the PSCs is approximately 21,500 square kilometres with significant 2D and 3D seismic data already acquired by Niko. Multiple leads and prospects, along with underexplored new plays, have been identified across the portfolio, across a mix of clastic and carbonate play types in both proven and frontier basins.

"We are excited by the exploration and market opportunities in South East Asia, which can complement our continued expansion in Africa,” said Nick Cooper, CEO of Ophir Energy.

“This transaction with Niko Resources provides one new country entry but access to three new core areas. The asset package adds a high impact, deepwater, exploration portfolio to our existing asset base at a very low entry cost.

“Indonesia is a mature, hydrocarbon producing province with a long-established regulatory and fiscal framework that contains an exciting mix of proven and frontier deepwater basins. The latter are largely underexplored and are in-line with our strategy of early entries into operated, potentially transformational acreage where multiple geological plays have been identified.

“This deal represents a significant reloading of the company's exploration portfolio, expanding our gross acreage by 40 per cent and, in combination with Ophir's recent Myanmar PSC award, positions Ophir as a leading deepwater Asian explorer. We look forward to delivering a number of high impact wells from this new Asian portfolio as well from our existing African assets in the coming years."

The transaction brings access to large acreage positions in highly prospective basins and expands Ophir's footprint in South East Asia, following the award of acreage offshore Myanmar earlier this year.

Post completion, Ophir will be a leading deepwater exploration acreage holder in Indonesia and the transaction will increase the company's total gross licensed acreage by 40 per cent.

Ophir is required to pay a cash consideration of USD 31.3m with further payments contingent on exploration success.

The licences are split broadly into three core areas - West Papua, Western Birds Head and the

Makassar Strait. The West Papua area is frontier and potentially high-impact, primarily prospective for oil within a carbonate play in which reservoir quality has been partially de-risked by drilling to date.

The Western Birds Head area, prospective for both oil and gas in clastic and carbonate plays, has been de-risked by existing discoveries on the Kofiau PSC. The Makassar Strait area is a proven, world-class hydrocarbon province in which several large fields feed the multi-train, but now under-utilised, Bontang LNG plant located onshore East Kalimantan.

The acquired acreage has already seen some 3D seismic acquisition and the maturing of several leads and prospects that could be commercialised via this route with the threshold for commercial volumes as low as around 200 billion cubic feet.

The initial focus of activity will be to re-interpret the existing 3D seismic data and to commission new 3D surveys on several blocks. It is expected that the first drilling campaigns are likely to start early 2016.

Ophir may decide to reduce its cost exposure to some of these wells prior to drilling.

Total net remaining liabilities and minimum spend commitments under the current terms of the PSCs are estimated at USD 1.3m. The company also expects a number of key Niko personnel based in country to transition across with the assets on completion.

 

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