Ophir Energy production down, will cut 15% of global workforce
This is 1.2 Mboepd below budget due to temporarily lower than expected production on the two gas assets.
Production from the Kerendan gas field averaged 12.3 MMscfd as the field ramped-up through the second quarter of 2017 to the full daily contract quantity of 19.2 MMscfd at a slower rate than expected.
Gross production from the Sinphuhorm gas field was forecast at 94.0 MMscfd for the half-year, as the off-taker EGAT temporarily reduced its offtake nominations. The nominations have recently returned to normal levels.
Gross production at the Bualuang oil field was 8.0 Mbopd in the period. An infill drilling programme on the Bualuang field commenced in May which will deliver increased production in the second half of the year.
With the lower Group production achieved in 1H 2017, and allowing for the increase of Bualuang production in 2H 2017, the forecast full year production for 2017 is lowered to 12.0 Mboepd.
Ophir board has recently moved to further reduce the company’s underlying cost base in recognition of limited signs of an oil price recovery, and of lower exploration activity.
To decrease running costs, corporate roles in the London office and expatriate positions will be reduced by approximately 50% (equating to around 15% of the global workforce).
These actions are estimated to result in annual cost savings of $10-12 million (after one-off restructuring costs of $7 million). ■