Ophir Energy Plc said it had ended talks to partner with Schlumberger on its Fortuna project in Equatorial Guinea, leaving the oil and gas explorer to hunt for alternatives to move the project forward.
Ophir said it had been unable to complete the deal for its Fortuna project on the terms agreed in January, when it signed a preliminary contract with the world's largest oilfield services provider.
Shares in Ophir, which had projects in Africa and East Asia, fell as much as 25% on April 29, eroding the company's market value by over 160 million pounds (US $233 million).
Ophir CEO Nick Cooper said the company was in talks with a number of other “quality counterparties” that could offer funding. He did not disclose any names.
Stifel analysts said Schlumberger’s exit had put a question mark on the read-through value of the project, especially as the deal had fallen through after the U.S. company had done its due diligence.
Fortuna, Africa's first deepwater independent floating FLNG project, is one of a number of projects planned when prices were higher.
The field is expected to produce 2.2 million tons per annum and Ophir currently has an 80 percent working interest in the field, according to its website.
Under the head of terms agreement signed in January, Schlumberger had agreed to take a 40 percent economic interest in the project.
The company would have reimbursed Ophir for half of its previous costs in the project, which was expected to help cover Ophir's share of capital expenditure up until first gas sales.
“(Schlumberger’s exit) raises obvious questions how Ophir can move the project forward,” Liberum analyst Andrew Whittock told Reuters.
Ophir pushed back expectations for a first investment decision on the project April 29,, saying it would take time to reach binding deals with other potential partners.
A decision on first investment will be made in the fourth quarter of 2016 and first production will is expected by early 2020, the company added.
It had earlier expected to make its investment decision in mid-2016, with production in 2019.
Ophir shares had pared some of their earlier losses by 1000 GMT, but were still on track for their worst day ever. The stock, down 18% at 75 pence, was the second-largest percentage loser on London's midcap index.
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