Ophir Energy has signed a Sales and Purchase Agreement ('SPA') relating to the sale of its 23.33% interest in Block 5 (Cuenca Salina), offshore Mexico, to the existing partners in the Block 5 exploration licence, subsidiaries of Murphy Oil Corp, Wintershall Dea and Petronas.
Upon closing, interest in the licence will be held by Murphy at 40% (operator), Sierra Offshore Exploration at 30% and PC Carigali Mexico Operations at 30%. The sale is for a cash consideration of $35 million, which accounts for back costs (including its share of the recent well) alongside a cash premium.
The proceeds will be used to enhance liquidity.Ophir Energy Plc The gross book value of the asset being sold is $24 million. The sale is expected to close before the end of the year and is subject to government and regulatory approval under the Block 5 exploration licence.
This transaction is consistent with Ophir's stated strategy of minimising its exposure to exploration and the update provided in our 2018 Financial Results that stated we were in advanced discussions with regards to the sale of our interest in Block 5.
Stellar Advisors were retained by Ophir to manage the process. Bracewell (UK) LLP acted as legal adviser to Ophir.
Note: Murphy Oil announced in March that it had encountered oil and gas in its Cholula-1 well in Block 5 in the Salina del Istmo Basin offshore Mexico, though further drilling will be required to confirm commerciality.
Murphy was targeting gross mean resources of 220mmboe in the Upper and Lower Miocene and partner Ophir Energy indicated that the results were broadly in line with pre-drill expectations.
