AFRICA-FOCUSED oil explorer Ophir Energy’s share price soared over 16 per cent yesterday morning, after the FTSE 250 firm agreed to sell half its stake in a Tanzanian project for $1.29bn (£800m).
The firm, which is backed by billionaire Indian steel tycoon Lakshmi Mittal, sold a 20 per cent interest in three offshore Tanzanian liquefied natural gas (LNG) blocks to Pavilion Energy, a unit of Singapore investment firm Temasek.
The Tanzanian fields, which Ophir discovered with its partner BG Group, are estimated to hold 15 trillion cubic feet of gas. The sale is expected to complete in the first quarter of 2014.
“[The deal] supports our plan to secure long-term energy supply at competitive prices to meet the need for clean energy in Asia,” said Pavilion Energy’s chief executive Seah Moon Ming. “This is also important for us as we work to develop an Asian LNG hub.”
Asian demand for gas is rising sharply and Singapore is looking to position itself as a storage and shipment hub in the region.
“This is very positive news for Ophir as the company has been talking about farming down assets for over a year,” said Malcolm Graham-Wood, analyst at VSA Capital.
“Ophir is now very well-funded for its future exploration programme and has now proven it can identify and complete a transaction.”
Shares closed 10 per cent higher.