- Ophir Energy has agreed to acquire a package of Southeast Asian assets from Santos, an Australian listed oil and gas company, for an aggregate cash consideration of $205 million pre-working capital adjustments.

The portfolio of assets includes material producing assets in Vietnam and Indonesia plus exploration and appraisal assets in Malaysia, Vietnam and Bangladesh.

The transaction is in line with Ophir's strategy of rebalancing its portfolio towards a larger production and cash flow base to enable it to sustainably support the refocused exploration portfolio and to consider returning capital to shareholders. This rebalancing will also facilitate further economies of scale in operating expenditures, general and administration expenses and will provide greater capital allocation and financing efficiencies, the group said.

The company intends to fund the consideration through its existing financial resources and a new acquisition bridge facility, which it intends to replace in due course with an increase in the company's existing reserve based lending facility.

Nick Cooper, chief executive officer, said: "It is a declared strategic objective of Ophir to rebalance its asset base and become free cash flow positive in order to consider regularly returning capital to shareholders. This transaction accelerates the realisation of this goal.

"Ophir has maintained a strong balance sheet through the down cycle in order to benefit from such accretive opportunities that fit our established expertise. The acquired assets also offer an attractive combination of operational upside and material cost synergies with our existing Southeast Asian production base."

Current operations are performing in line with the guidance provided at the full year results in March 2018. The company's existing production is expected to average 11,500 boepd in 2018 and generate net funds from production of $90 million.

At 8:09am: [LON:OPHR] Ophir Energy share price was +1.9p at 61.3p

Story provided by