Ophir Energy falls on share sale despite finding gas in Tanzania

SHARES in Africa-focused oil explorer Ophir Energy plunged yesterday, as Credit Suisse said it placed 36m shares on behalf of the investment funds of investors Och-Ziff Capital Management and Mittal Investments.

The shares were sold at a price of 475p per share, raising £171m. Both institutional shareholders have agreed to a lock-up period of 90 days with respect to their remaining stakes in the exploration group.

Credit Suisse acted as bookrunner for the placing.

The share sale overshadowed a positive operations update from the FTSE 250 explorer, where it announced the successful results from its appraisal programme on the Mzia field in Tanzania.

Ophir, which holds 40 per cent of the project alongside BG Group that owns 60 per cent, said that a well had found gas. The well has now been suspended so Ophir can start flow testing.

“Overall, we see the operations update as positive, although not materially so – there is no sign of a Mzia resource upgrade,” analysts from Deutsche Bank said yesterday. “The share placing takes the gloss off the Mzia-2 announcement,” they added.

Shares in Ophir closed down 8.57 per cent yesterday at 475p, making it the biggest faller on the FTSE 250 index.