Ophir Energy's Sixth Gas Discovery in Tanzania Lower Than Expected

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FTSE 250 oil and gas firm Ophir Energy plc (LSE:OPHR) made its sixth gas discovery in Tanzania but said the gas find was lower than what the company hoped it would have.

In a statement released earlier today, the Africa-focussed explorer said Papa-1 well, its sixth well located in Block 3 offshore Tanzania, encountered 89 metres of gas column suggesting around 500 million to two trillion cubic feet of gas (tcf) in place.

The Papa-1 prospect, according to the company’s 3rd July 2012 update, has an estimated unrisked mean recoverable resource of 3.1 tcf of gas or about 517 million barrels of oil equivalent.

“While recoverable resources are likely to be lower than pre-drill estimates, this very encouraging discovery is expected to lead to substantial additional resources,” Ophir Energy Chief Executive Nick Cooper stated.

Business As Usual

Nonetheless, the latest discovery, along with the fifth one announced in May 2012, will considerably increase the total recoverable resource in offshore Tanzania, reported at seven trillion cubic feet or about 1.167 billion barrels of oil equivalent.

Ophir Energy, which holds 40% interest in the venture and the other 60% controlled by BG, the operator of the JV, said further analyses will be performed to “refine the in place and recoverable resource estimates”.

Meanwhile, exploration in Ophir’s other assets across Africa are simultaneously taking place, with some 800 billion cubic feet of gas equivalent to 133 million barrels of oil was further discovered at its 80% controlled block in Equatorial Guinea, announced a week ago.

The said well is part of the three-well drilling programme in the said asset as the company is hyped to become a major supplier of LNG.

“Ophir has transformed its resource base with the four discoveries across our assets in the first half of 2012,” CEO Cooper stated, adding that two wells are anticipated to yield results by September.

Shares of Ophir Energy slightly recovered but were still down 9.7% to £5.26 a share on the London Stock Exchange at 2:45 PM GMT, after falling 13% in early morning trading, as the market focussed on the shortfall in anticipated gas volumes.

Company Spotlight

Ophir Energy plc is a UK-incorporated holding company of businesses engaged in oil and gas exploration and production, focussing in Africa. The company has 17 projects in eight countries, namely: Senegal, Congo (Brazaville), Equatorial Guinea, Gabon, Madagascar, Saharawi Arab Democratic Republic, Somaliland, and Tanzania.

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