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