(Reuters) - Ophir Energy (OPHR.L) wrote down the value of its liquefied natural gas (LNG) project in Equatorial Guinea by $310 million (238 million pounds) as it struggles to finance it ahead of a December deadline.
The oil and gas producer also announced job cuts and said it would shift its headquarters to Asia, where it recently acquired new assets and where a new chief executive would be based.
Ophir’s shares were almost 4 percent lower at 0730 GMT at 36.39 pence. Its share price has fallen by more than 50 percent since the start of the year, due largely to its failure to progress with the LNG project. Ophir’s long-term CEO Nicholas Cooper was replaced in May as part of a shake up.
The Fortuna project would have been the first floating LNG facility in West Africa using the pioneering technology of an offshore LNG production plant. But Ophir has little experience in complex LNG projects and a small balance sheet.
In the end, the Fortuna project was beaten by the Hilli floating LNG project, using the same technology, in neighbouring Cameroon.
“On Fortuna, we are continuing to work to deliver value for our shareholders whilst we are in possession of the licence. Reflecting the uncertainty surrounding this however, we have impaired the value of the asset to $300 million,” it said.
Ophir ran into problems trying to raise $1.2 billion for the project and was told by the government it may lose it if it did not come up with the cash by December.
The company said last week it was “cautiously optimistic” about the project.
But in a nod to the troubles it has had with it, Ophir said it would “minimise” its exposure to “frontier exploration” and “focus on nearer field exploration opportunities that can drive production growth and/or extend field life”.
It said revenue for the first half of the year rose 15.5 percent to $102 million, helped by higher prices, with production at 11,400 barrels of oil per day, slightly above expectations.
Reporting by Shashwat Awasthi in Bengaluru and Sabina Zawadzki in London; Editing by Sai Sachin Ravikumar and Alexander Smith