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KrisEnergy enters facility of up to US$87m with Keppel unit
TWO indirect subsidiaries of KrisEnergy have entered a credit facility agreement of up to US$87 million with Kepinvest Singapore, a unit of Keppel Corp, to finance a project in Cambodia.
In a Thursday bourse filing, KrisEnergy said that the facility will be used for its near-term development project at Cambodia Block A (CBA), an offshore oil-and-gas asset in the Khmer Basin in the Gulf of Thailand.
The two KrisEnergy subsidiaries, KrisEnergy (Apsara) Company and KrisEnergy (Cambodia), have a 95-per-cent working interest in the project. The asset 3,083 sq km in size.
As announced last December, KrisEnergy is developing the minimum facilities wellhead platform for the Apsara oil field in CBA. But due to the unproven production performance of the Khmer Basin, development of the oil field will be in several phases to mitigate risk.
If the development progresses to further phases, KrisEnergy expects peak production between 2024 and 2026. The present development phase, called Mini Phase 1A, is designed to incur minimum costs to first oil, the company said. This phase comprises the wellhead platform and five initial development wells.
Mini Phase 1A is scheduled to commence oil production this year and reach a peak production rate of 7,500 barrels of oil per day. KrisEnergy estimates that about US$87 million will be required to fund Mini Phase 1A until first oil is produced.
On the rationale for the credit facility, KrisEnergy said that, except for Kepinvest, banks and alternative credit providers had generally declined to offer it new credit lines.
“Despite the group’s efforts to improve its liquidity and financial position, prolonged volatility in oil prices and equity markets and weakening sentiment towards the upstream and offshore marine sectors impeded the group’s efforts to recover and operate in a manner that would be sustainable in the long run,” KrisEnergy said.
Shares of KrisEnergy last traded at S$0.03 before suspension last year.