Ophir Energy slashes capex as first half profits fall

The loss compares with a profit of $589m last time. Revenue was $86.5m compared with nil in 2014. Ophir said it was now benchmarking all its activities against a $50 oil price.

The loss was caused by an increase in exploration expenses to $94.9m from $67.7.

Capital expenditure has been cut by 50% and full-year capex will now be $250-$300m, before further cuts in 2016, Ophir said.

It added that with the recent decline in oil prices, forecast underlying operating cash flow from producing assets is revised to $110m-$130m for the full year.

“Investments that offer shareholders strong returns are the only ones being progressed. A combination of our low commitment expenditure and strong net cash position provides Ophir with great flexibility with respect to investments over the next three years,” the company said.

Ophir said it has also made $60m in yearly cost savings through job cuts, office closures and “efficiencies”.

"In a tough operating environment for E&P companies Ophir continues to differentiate itself through the robustness of its financial position, the progression of its field development plans and a commitment to acquire quality exploration acreage with minimal financial commitments that offer attractive returns at current commodity prices," said Chief Executive Nick Cooper.