Case Studies

Competent Person’s Report on Santos’ Asian assets – Ophir Energy

Overview

RISC has recently completed a project for Ophir Energy Plc (Ophir) to provide a Competent Person’s Report (CPR) on Santos’ Asian assets (two Indonesia and one Vietnam Production Sharing Contract (PSC)), compliant with the requirements of a Class 1 transaction under the Listing Rules of the London Stock Exchange, for inclusion in a circular.

Our approach

The assets are the Santos operated Sampang PSC offshore East Java, Indonesia which contains the Wortel and Oyong gas fields, the Santos operated Madura Offshore PSC East Java, Indonesia which contains the Peluang and Maleo gas fields and Block 12W offshore Vietnam operated by Premier Oil plc, which contains the Chim Sáo and Dua oil fields. Over 70% of the total value of the proposed acquisition is attributable to the Chim Sáo and Dua oil fields.

RISC reviewed the reserves/resources of the five producing fields in accordance with the Society of Petroleum Engineers’ internationally recognised Petroleum Resources Management System (SPE-PRMS).

RISC conducted decline curve analyses on Chim Sáo Field and evaluated future development opportunities and in aggregate supported the Vendor’s 2P recovery estimates on Chim Sáo and Dua Fields which are based on reservoir simulation. However, RISC generated its own 1P, 2P and 3P oil production forecasts that better reflect the 2018 production to date which has been higher than previously forecast.

Challenge

RISC was already familiar with many of the assets so the technical analyses were relatively straight forward. Significant time was invested in quality control of the economics due to the PSC terms but the real challenge was for RISC’s Project Manager in London to coordinate work and discussion between the RISC technical team based in Perth and Ophir’s technical team and Project Manager based in London. Significant effort was also invested in managing the liaison with Ophir’s legal, financial and tax advisors, in London together with the financial regulators (UK Listing Authority) in achieving stock market release of the Shareholder Circular on time. This focus on relatively seamless integration between the teams was a critical success factors for this project.

Outcome

RISC’s Competent Persons’ Report was included in Ophir’s Shareholder circular. In August 2018 Ophir obtained shareholders’ approval for the proposed acquisition of the package of Southeast Asian assets from ASX-listed Santos Ltd, valued at a total of US$221 million. The client greatly valued RISC’s analysis and contribution towards the successful transaction.

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