Ophir Energy rallies on report of merger interest

Shares in oil and gas exploration company Ophir Energy rallied following a report that it has received informal takeover and merger interest from several parties as a drop in crude oil prices forces independent operators to consolidate.

Bloomberg cited people familiar with the matter as saying that Ophir has attracted interest from both companies and financial investors.

Ophir was said to be evaluating the proposals although deliberations are at an early stage and it may decide against a deal.

Independent oil explorers have come under pressure recently amid mounting concerns over their ability to withstand falls in the oil price.

Unlike several of its peers, Ophir has low debt levels and net cash of almost $400m at the end of June as well as assets in Africa and Southeast Asia, which make it an attractive target for potential buyers or partners.

The company recently revealed an independent reserves report confirmed it had over 1bn barrels of oil equivalent (boe) in its reserves.

At 1150 GMT, Ophir shares were up 7.5% to 90.95p.