Ophir has signed a Sales and Purchase Agreement (SPA) relating to the sale of its 23.33% interest in Block 5 (Cuenca Salina), offshore Mexico, to the existing partners in the Block 5 exploration licence, subsidiaries of Murphy Oil Corporation, Wintershall Dea and Petronas.
Upon closing, interest in the licence will be held by Murphy Sur, S. de R.L de C.V at 40% (operator), Sierra Offshore Exploration, S. de R.L. de C.V. at 30% and PC Carigali Mexico Operations, S.A. de C.V. at 30%. The sale is for a cash consideration of US$35 million, which accounts for back costs (including its share of the recent well) alongside a cash premium. The proceeds will be used to enhance liquidity.
The gross book value of the asset being sold is US$24 million. The sale is expected to close before the end of the year and is subject to government and regulatory approval under the Block 5 exploration licence.
This transaction is consistent with Ophir’s stated strategy of minimising its exposure to exploration.