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Hot stock: KrisEnergy shares down 6.2% after wider Q4 loss

SHARES in KrisEnergy fell heavily on Wednesday morning after the upstream oil-and-gas outfit posted a day earlier a higher net loss for the fourth quarter of US$97.33 million, up from US$87.57 million for the year-ago period.

The company also said on Tuesday that it has appointed advisers to formally evaluate and implement all viable options available to the group, as it remains over-geared and underequitised.

Its shares shaved off 6.2 per cent or 0.5 Singapore cent to 7.6 Singapore cents as at 11.19am. The counter saw heavy trading with about 17.5 million shares changing hands.  

In its earnings statement, KrisEnergy said revenue for the quarter fell 47.7 per cent to US$17.41 million on depressed sales volume.

The company said: "While balance sheet management is critical for all operational, financial and strategic decisions, the group has been unable to materially improve liquidity via inorganic means due to covenants imposed by the group's secured and unsecured lenders.

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"Organic improvements in liquidity were evident in 2018, however, a material part of the group's liquidity was allocated to debt service, which as a result diverted capital from income-generating activities such as the development of net present value positive developments within the group's portfolio."

It was also disclosed that on April 9, 2018, DBS provided an additional commitment of US$20 million - or an upsize of a bridge loan - under the revolving credit facility for an initial maximum period of three months. KrisEnergy has since then extended its maturity date on its upsized bridge loan to March 8 with the bank.

As of Dec 31, 2018, the group's total equity declined to US$10.1 million, compared with its year-ago total equity of US$159.7 million. This was a result of significant non-cash expenditures relating to finance costs, asset impairments, writedowns and depreciation, depletion and amortisation charges.

Total debt recognised on the group balance sheet as at year-end of 2018 stood at US$459.1 million. The group's gearing as at Dec 31, 2018, was 99.9 per cent.

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