Ophir Energy has taken a near $310 million impairment on its proposed Fortuna floating liquefied natural gas project off Equatorial Guinea but remains in talks with potential partners about rescuing the troublesome scheme before the imminent expiry of its licence.

The London-listed player, which is to shut its headquarters in the UK capital and set up shop instead in its new core area of Southeast Asia, chopped its valuation of the proposed Block R development to $300 million and admitted it could plunge to zero at the end of the year, when the production sharing contract expires.

The writedown on Fortuna made up the bulk of $358 million in total impairments in the first half, which were instrumental in Ophir running up a loss of $375.41 million as against a loss a year earlier of $84.62 million.

The $309.89 million writedown on Fortuna, made “due to the uncertainty around the value (Ophir) can ultimately realise" on the project, was described in the financial statement as an "impairment on non-current assets held for sale".

However, interim chief executive Alan Booth is adamant the company “has not given up” on the project or Equatorial Guinea.

“We are not leaving. We have not given up on EG,” Booth said in an investor presentation late last week, adding that Ophir is still in discussions “with a number of credible, financially capable companies who have the ability to deliver that project”.

He added: “We don’t have a deal, but we understand what it takes to make a deal happen.”

“We haven’t given up on EG. We are working very hard. We will do whatever we can to deliver a project there,” he said, although admitting “we are up against the clock”, given the impending licence expiration.

Both Booth and chief financial officer Tony Rouse said a significant number of factors were considered in pegging the current value to Ophir of Fortuna at $300 million.

Both added, however, that this figure will change either positively or negatively at the end of the year, depending on what happens with possible partners or the licence. “We needed to move away from the number we were holding... There was no offer on the table,” Booth said.

“We felt that $300 million was a reasonable number to land on given the risks, the timeframes and the people we are talking to.”

On the possible future valuation of Fortuna, Booth added: “We hope it would be north of zero — it could be zero, it could be more than that.”

Ophir’s plan to get the Fortuna FLNG project off the ground has suffered a number of blows in recent months, not least the decision by oilfield services giant Schlumberger to pull the plug on its OneLNG joint venture with Golar LNG, which is a partner in the deep-water project. The partners have also had trouble securing financing for the scheme. Ophir and OneLNG had been in talks with Chinese yards to secure finance but sources said the government in Beijing, in return for funding, wanted the FLNG vessel converted in a domestic yard.

Ophir made revenues in the first six months of $102.07 million, up from $88.29 million a year earlier.

Full-year production is seen at 27,500 barrels of oil equivalent per day, up from an earlier forecast of 25,000 boepd, with projected capital expenditure kept at $145 million.

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