Loyz Energy unit inks supplemental agreement with Carnarvon Thailand

LOYZ Energy Limited, a Singapore-based upstream energy group, said its wholly owned unit Loyz Oil Thailand Pte Ltd has entered into a supplemental sale and purchase agreement on Jan 15 with Carnarvon Thailand Limited, for the amendment of certain terms in the sale and purchase agreement dated Feb 28, 2014.

The agreement was in relation to the acquisition by Loyz Oil from Carnarvon of a 20 per cent participating interest in SW1/L33/L44 oil concessions located at Phetchabun Basin, Thailand, that was announced in March 2014.

The acquisition, which was completed in April 2014, was for a total consideration of US$65 million, of which US$33 million was satisfied in full on the date of deal completion, and the remaining US$32 million to be satisfied as a debt due and payable by way of post-completion receivable payments on Nov 30 each year, with the first payment due on Nov 30, 2015.

Under the supplemental agreement, the first payment for the post-completion receivable payment, amounting to US$702,000, has been amended and shall be satisfied by a payment of US$100,000 in cash by Dec 30, 2015, and a payment of US$602,000 in the form of 21.6 million new shares at 4 cents apiece by Jan 31, 2016.

The proposed shares issue is subject to approval from relevant authorities, including the Singapore Exchange.

"This equity participation by Carnavon will improve our cash flows for the operational requirements of the Concessions," said Loyz Energy managing director Adrian Lee. It will also strengthen the group's balance sheet.

A drilling programme for further exploration of the resources at the oil concessions is being implemented.