Special report: Can Santos assets drive Ophir Energy forward as shares continue to languish? (OPHR)

Thanks to delays and write-downs related to its Fortuna development, shares in Ophir Energy (LSE:OPHR) have suffered this year, falling from highs of 76p in January to their current 42p. However, against this backdrop, the company has been pursuing a new strategy that has seen it cut exposure to risky frontier exploration and focus on establishing a more significant production and cash flow base.

Key to this change has been its purchase of a $205m package of producing, exploration and appraisal assets across South East Asia from an Australian business called Santos, which completed last month. Despite the deal looking set to double Ophir’s 2018 funds flow from production to c.£161.9m – a considerable portion of its current £296m market cap – its shares are yet to enjoy any meaningful positive movement.

There is no question that a write-down of up to $600m this year related to Fortuna will be a significant blow for Ophir. However, in this report, we argue that the market’s focus on the firm’s problems are leading it to overlook the potential it now offers both in terms of current production and potential upside. With Ophir attracting a vast amount of institutional support as the Santos assets continue to outperform, we make the case that the fully-funded company could represent a great buying opportunity at its current valuation.

CLICK HERE TO DOWNLOAD the full report from ValueTheMarkets.com

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