Ophir Energy shares jump 13 per cent on joint operating company agreement for Equatorial Guinea gas project

Francesca Washtell
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Ophir is an oil and gas exploration company in Africa and Asia (Source: Ophir Energy/Flickr)

Shares in Africa and Asia oil and gas exploration company Ophir Energy have jumped 13 per cent after the firm agreed to establish a joint operating company (JOC) to develop a gas block off Equatorial Guinea.

A subsidiary of the former FTSE 250-listed group, Ophir Holdings & Ventures, has signed a binding agreement with OneLNG, a joint venture between Golar LNG and Schlumberger, to develop the Fortuna project in the offshore Block R.

Ophir will have a 33.8 per cent stake in the new JOC, while OneLNG will own the remaining 66.2 per cent.

Read more: Ophir Energy to use Salamander cash for further exporation

First gas from the project is anticipated in the first half of 2020 and is anticipated to generate $560m (£451m) in cash flow per year. Capital expenditure for the integrated project is approximately $2bn to reach first gas, of which $1.2bn is expected to be debt-financed.

The JOC will facilitate the financing, construction, development and operation of the integrated Fortuna project and, from next year, will own Ophir's share of the Block R licence and the Gandria floating liquefied natural gas (FLNG) vessel.

Read more: Ophir Energy cuts its board to reduce its costs

Ophir shares were up 13.22 per cent to 78.12p during mid-morning trading.

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The group was founded in 2004 and floated in London in 2011. Equatorial Guinea had 1.34 trillion cubic feet of proven natural gas reserves in 2014.

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