Ophir Energy has noted a $300 million impairment charge after it announced it had not gained an extension to its license for the Fortuna LNG project.
The company spent the last two years looking for a partner to help fund the project in Equatorial Guinea, which was set to be Africa’s first deep water floating LNG project.
Analysts have said the decision by Equatorial Guinea’s ministry of mines and hydrocarbons not to extend Ophir’s license “draws a line” under its plans for the project, but failure to do so has continuously delayed final investment decisions to be made.
“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’s interim chief executive.
The failure of the project has caused investors to sell stakes in the company, putting pressure on the share price of the company that is still suffering from the oil crash of 2014.
Charlie Sharp, an analyst at Canaccord Genuity, said: “At least two years of Ophir’s life up until the middle of last year had been pretty much devoted to this. They had all of their eggs in that one rather uncertain basket.”
Following a number of acquisitions, Ophir is now focusing its attention on south-east Asia, where a its entire production and development efforts are based. However, earlier this month, it announced it had been the subject of takeover talks from Indonesian oi and gas group Medco Energi.