89p +2p

Ophir Energy plc
Heads of Agreements signed for sale of gas and Capex reductions for Fortuna FLNG

Ophir Energy announces that it has signed Heads of Agreements ("HoAs") for LNG offtake from the Fortuna FLNG project with six counterparties, all of whom are established LNG buyers in European and Asian markets.

Furthermore, the Management estimate of the gross capital expenditure required to first gas has been revised downwards from $800 million to $600 million (i.e. from $640 million to $480 million net to Ophir's 80% working interest) based on recent input from the ongoing upstream FEED work.

Ophir is selling 2.2 MTPA of LNG offtake, however the total demand requested under the HoAs has seen the offtake sold several times over. The HoAs are based on a variety of different pricing constructs with formulae that consist of either European gas market netbacks, oil indexation or a combination of both and that in some cases include the provision of a floor price. Offtake under several of the HoAs also incorporates a sharing of incremental diversion income earned above the base contract formula for LNG volumes that are subsequently sold into higher value markets.

As well as pricing structure, Ophir has secured additional elements to its LNG offtake HoAs that are significant for the development of the project. These include the offer to pre-pay for LNG volumes in substantial quantities over the early years of the contract. The funds received from pre-payments could cover 30%-50% of Ophir's total net cost to first gas and could therefore be a major contributor towards funding of the project.

The Upstream FEED process is presently c. 50% complete and as a result Management is able to refine and reduce the remaining upstream cost to first gas. The project has been able to capitalise on the deflationary cost environment and has been redesigned to increase standardisation of components wherever possible. Accordingly the current Management estimate for gross cost to first gas has reduced c. 25% from previous guidance to c. $600 million ($480 million net).

Separately, Ophir has contracted Fugro to perform geotechnical, environmental and metocean surveys for the Fortuna project. The Fugro Searcher, Fugro Scout, and Fugro Frontier vessels have been deployed for this work, which is scheduled for completion in January 2016.

Taken a punt on the stock again @78p

The chart look very good as the share price has reached the lower Band on the Bollinger Bands ( buy time ) and Indicators at oversold or close to it. Also it seems a bottom has been established for the last couple days on the chart

A marked down to 76.20p at the opening as the market was over 70 points lower, but soon recover with a large spike to 78.40p.
needs a bit of consolidation now.

mentor - if you're in touch with this company, you may like to enquire as to whether or not they have a stake in Helium One