Takeover target Ophir Energy Plc (LON:OPHR) has revealed it is to suffer a further US$300mln blow in connection to the stalled Fortuna gas project.
Ophir, in a statement, told investors that it has been informed by the Equatorial Guinea authorities that the licence covering Fortuna won’t be extended, following expiry on 31 December 2018.
It means the Ophir will record an additional US$300mln non-cash impairment.
READ: Ophir soars on cash takeover talks
The company, which recently announced it was holding discussions with Indonesian firm Medco over a possible cash offer for Ophir’s entire share capital, and, today, it noted that the talks have taken place “in the shared knowledge that there were a number of potential outcomes with respect to our Fortuna asset”.
Talks with Medco continue, Ophir said
"It is disappointing that the ministry has decided not to extend the licence, despite the amount of effort and cost dedicated to the delivery of the project and especially as we were still talking to highly credible potential co-investors,” said Alan Booth, Ophir interim chief executive.
“Nevertheless, we will continue to work constructively with the authorities in Equatorial Guinea.
Booth added: “Looking ahead, the group's cash flow, capital commitments and growth prospects will be focused in Southeast Asia, where we have built a robust operating platform capable of delivering value to shareholders."