Ophir Energy Share Discussion Threads

[ileeman] 18/9/2018 19:40

Salingstone had 20million shares on their last holdings RNS, there has been 50million volume since then. Highest volume day in over a year today.

Expect them to be out this week or early next week, when they clear expect an aggresive rebound dont forget they smashed price down from 80p+ for over a year and oil price is much higher now.

[nigelpm] 18/9/2018 19:15

Done a bit of that as well arte.

Whilst SQZ is still great value the upside here and downside protection is far greater.

[yasrub] 18/9/2018 17:12

I have had a dabble today, no idea about where the bottom is - but Alan Booth has a great track record and as he has been buying around this level it gives a little reassurance.

[ashkv] 18/9/2018 17:07

Sailing Stone should be done by now. Was at 2.7% notifiable limit a few weeks past.
Capital does not appear to be selling any longer as no RNS to effect - still hold 10%.
Alamaison5 - bottom timing is a precarious game :)

[romeike] 18/9/2018 17:02

More significant director buys making me feel good

[alamaison5] 18/9/2018 16:07

iLeeman18 Sep '18 - 15:55 - 4833 of 4833 (Filtered)

Well Capital and SailingStone are still selling so 130k (or £50,000), as you say lol, won't make much difference...
When a fund manager or an institution is selling, there is no stopping...until the're done...
So, your guess is as good as mine...
36p, 34p, 32p?

[ileeman] 18/9/2018 15:55

More director buys, I make that the 3rd or 4th now.

I am following the money down here and added another £10k.

[someuwin] 18/9/2018 15:50

Director buys 130k.

[alamaison5] 18/9/2018 13:32

Got a buy order at 36p then 33p. Yep, very unvalue, lol.

[ashkv] 18/9/2018 11:55

At 38p share price Ophir Enterpise Value in USD with 1.31 exch rate is
[$351 market cap + $240 Debt post Santos - $75 H1 end cash) = $516.08 million

On a per barrel basis that works out to $516,080,000 Enterpise Value / 27,500 (2018 Proforma Production)= $18,766

Therefore on current market cap / enterprise value an acquiring firm can buy Ophir and the deal would pay for itself in less than a year [Ex Admin, Tax, Exploration, Capital Expenditures]

INSANELY CHEAP.....

[ashkv] 18/9/2018 11:22

Our Asian production base has low operating costs, averaging $12 per boe (post merger - page 4 of H1 Results)

Average Brent price for H1 2018 per Statista is $71.17 and for FY 2017 $54.25 (Average price for Ophir pre-Santos Crude Oil is $67 H1 2018 and $50 FY 2017) Therefore a discount of $4 to prevailing Brent. However, 9,000 bpd Santos acquired crude oil field trades at a premium to Brent - therefore assuming Brent price for full oil production is -- 9,200 Chim Sao and Dua fields [0il] + 7,800 Bualung = 18,000 bpd, the remaining 27,500 (Total) - 18,000 (Oil) = 9,500 Gas

Therefore on a per barrel basis Projected 2019 Revenues are

First we calculate Total Projected Revenues based on constant H1 2018 Oil/Gas prices

--> [(18,000 bpd * 365 * 71.17 Brent Price) + (9,500 bpd * 365 * 32.58 Gas Price )]
= $580,558,050

On a per barrel basis assuming Ophir maintain 2019 at H1 2018 production of 27,500
--> $580,558,050 / 27500 = $21,111 Projection for blended Gas/Oil Barrel of production by Ophir

BELOW IS THE PER BARREL OPERATING MARGIN - NOT TAKING INTO ACCOUNT ADMIN COSTS, TAX, CAPITAL EXPENDITURE AND INTEREST COST

= [(18,000 bpd * 365 * (71.17 Brent Price -$12 Opex)) + (9,500 bpd * 365 * (32.58 Gas Price - $12 Opex)] = $460,108,050

Therefore on a per barrel basis taking a blended Gas/Oil Barrel production rate of 27,500 for 2019 the calculation is $460,108,050/27,500bpd = $16,731.2 of Gross Profit Margin per barrel

[ashkv] 18/9/2018 10:45

Including the production from Block 12W, Vietnam and the Madura Offshore and Sampang PSCs in Indonesia, we expect (on a proforma basis*) that group production for 2018 will be around 27,500 boepd. Actual production during 2018, incorporating the assets from the completion date of 6 September 2018 is forecast to be approximately 17,000 boepd.
Our Asian production base has low operating costs, averaging $12 per boe, low maintenance capex and consequently is highly cash generative. In our base case, over the next three years we expect productionfrom these assets to average around 25,000 boepd, with variations above and below that number on annual basis depending on timing of maintenance and drilling programmes.
At current commodity prices and after budgeted investment programmes, we expect our production base to generate free cash flow of $300 million over the next three years.
Furthermore there is identified, risked upside across all of our production assets, delivery of which would have the potential to drive production up beyond 25,000boepd. The near field exploration and development opportunities include:
- Bualuang Phase 5
- Bualuang North
- Kerendan Phases 2 and 3
- Meliwis development
- Paus Biru near field exploration
THE ABOVE IN OPTIMISTIC CASE TAKE PRODUCTION TO 35,000 Bpd in 2020

[ashkv] 18/9/2018 10:41

Santos CRUDE OIL Assets
Premier Oil, the operator of the Block 12W licence in Vietnam, which contains the Chim Sao and Dua fields, recently reported that the field maintained high levels of production in 1H 2018, with daily gros production averaging 29,000 boepd (9,200 boepd net to Ophir*). Two well intervention programmes are planned for 3Q 2018 to
offset natural decline from the existing wells. One of these was completed in August with the other to follow. A combination of low operating costs, at $10 per boe, and an oil thatcommands a premium to the Brent oil price, underpins Block 12W as highly cash generative asset.
Santos GAS Assets
The Madura Offshore and Sampang PSCs combined to average 9,300 boepd (net to Ophir) during 1H 2018. The fields are late stage assets but through relatively modest incremental investment, there is an opportunity to tie in satellite fields and deeper reservoirs, which will both bring new barrels on stream and extend the life of the existing production.

[ashkv] 18/9/2018 10:26

Proven Producing 2P Reserves post merger per poster Sophia are 42mn oil and 29mn gas.

For Ophir pre-merger fiels (11,500bpd) - production was per below according to H1 results. Breakdown was 30% Gas and 70% Oil

The Kerendan field generated revenue of $11 million (HY’17: $8 million) at an average gas price of $5.43 per Mscf (HY’17: $5.23)[THEREFORE Boe = $32.58 - Thanks for clarifying]. Revenue from the Bualuang field totalled $95 million (HY’17: $81 million) or $67 per bbl for the period compared to $50 per bbl for the same period last year. The increased average realised oil price arose from both a higher Dubai price, and a reduction in 2H 2017 of the contracted Dubai discount from $1.65 per bbl to $1.23 per bbl. From August 2018 the discount is further reduced to $1.08 per bbl.

Natural gas reserves are measured in per thousand cubic feet (MCF). 6000 cubic feet (6MCF) has the same energy potential as a barrel of oil, so 6 MCF is a BOE equivalent of 1 barrel

NEXT POST ANALYSIS FOR POST SANTOS MERGER BREAKDOWN OF OIL & GAS - AND PAYBACK OF HYPOTHETICAL OPHIR ACQUISITION BASED ON EXISTING POST SANTOS PRODUCTION. WILL ONLY BE A FEW MONTHS MORE THAN A YEAR.

[nigelpm] 17/9/2018 18:02

Indeed ohisay. Seems to go from the manic depressive of Jotoha and co to the manic excitement of ashkv - something rational and sensible in between would be nice.

[ohisay] 17/9/2018 16:31

Really I do despair of some posts on here .
At average price of $70 - one barrel of production will generate in a year $25,550
Taking into Opex $13 + Maintenance Capex $7 = $20 * 365 for yearly = $7300

Ophir is at a minimum 40% gas - gas is typically negotiated for a fixed price once a year - on a boe basis thats typically 35/40$ per barrel .
Please do your sums but get real..

[ashkv] 17/9/2018 15:45

Certainly see a takeover - however, Soco doesn't have the funds at present for a cash takeout. Would be a mix of cash and shares if Ophir agree. And at least a min price of 70p+

[romeike] 17/9/2018 15:39

Wouldn't be surprised at all to see OPHR taken out. Prices are rising but large producers are sitting on much leaner operations having undertaken massive cost cutting over recent years. Lots of free cash flow for itchy fingers leads to deals.

[speedsgh] 17/9/2018 14:40

Not sure if this has any relevance here in terms of potential acquirer? From today's rns by SOCO International -

"We are pleased to have concluded this financing transaction, and to have received such strong interest in the bank market and firm support from our new lenders.

The combination of existing cash, the new credit facility and the cash flow from our producing assets in Vietnam ensures that we are funded to take advantage of acquisition opportunities in line with our strategy of creating a full-cycle E&P company with a diversified portfolio."

[ileeman] 17/9/2018 12:28

@ash

It is a complete no brainer down here and the company has not been without its fault but the majority of the oversold shareprice is due to a large shareholder dumping 10%+ holding over the last year, they will be out this week or next.

Same old story people get scared and dont want to enter but then will chase higher after it has turned 10-20%.

Follow the fundamentals.

[ashkv] 17/9/2018 11:41

I agree with analyst estimates not being the be all and the end all - however, I recall a prominent investor conveyed they are good starting point to investigate an investment and can help shed light as to aspects that might have been overlooked by an individual...

[ashkv] 17/9/2018 11:38

I agree with analyst estimates not being the be all and the end all - however, I recall a prominent investor conveyed they are good starting point to investigate an investment and can help shed light as to aspects that might have been overlooked by an individual...

[ashkv] 17/9/2018 11:35

Well the Baron twitter squad are out in force.
In the first 3 hours today already 3mn shares traded with 2 to 1 Buys vs Sells

Oil is a commodity and Ophir a good size producer. Notwithstanding other assets it is producing 27.5k bpd with an Opex of $13 per barrel and lets say another $7 in capital expenses to maintain production.

Current Enterpise value [Debt(post santos)+Market Cap-Cash] on a per barrel basis is around $18,000

At average price of $70 - one barrel of production will generate in a year $25,550
Taking into Opex $13 + Maintenance Capex $7 = $20 * 365 for yearly = $7300
Therefore an acquirer can buy Ophir at current share price and in a year almost pay off the transaction ($25,500-$7,300 = $18,200)
Of course Ophir has commitments for Exploration of $85m over 5 years ($13m is already allocated for H2 2018 and the rest high probability in Asia / Mexico that will add to production or in process of being farmed out). Certain projects in Asia also provisioned over 2018/2019 for Capex to increase production in Asian fields with project payback IRR of 40% over 18 months. IT IS A NO BRAINER SHARE. FALLING KNIFE FOR SURE - BUT DEEPLY OVERSOLD AS IS....

[ed 123] 17/9/2018 11:32

No probs, Arteespresso. :-)

Maybe seen the bottom?

GLA