KrisEnergy restructuring plan no longer viable as Apsara oil field shows 'disappointing' results

THE CONTINUED "disappointing" results of KrisEnergy's Apsara oil field in Cambodian oil concession Block A means its restructuring plan is no longer viable, the troubled oil and gas group said in a bourse filing on Tuesday.

There remains "material uncertainty" over the company's ability to continue as a going concern.

KrisEnergy also said it has not been able to propose an alternative restructuring plan to DBS, the provider of a US$200 million revolving credit facility and Keppel Corporation Limited, which holds the key economic risk in the revolving credit facility.

Therefore, the revolving credit facility will not be extended as stipulated conditions have not been fulfilled.

In a separate filing on Tuesday, Keppel Corporation said the amount outstanding under the facility and carrying values of KrisEnergy's investment, loan receivable and contract asset "would be significantly and negatively impacted by the current situation", especially if the company cannot continue to be a going concern.

The amount outstanding under the revolving credit facility currently stands at S$250.8 million.

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Keppel Corporation said it is evaluating the potential financial impact on the values and determining its best course of action to preserve value for shareholders.

The Apsara field lies over the Khmer Basin, an unproduced geological basin in Cambodian maritime waters in the Gulf of Thailand. The current development phase, which KrisEnergy calls Mini Phase 1A, was an initial small-scale project aimed at appraising reservoir performance in Cambodia Block A (CBA).

The development of CBA formed the basis of KrisEnergy's restructuring as it had expected the bulk of the group's future revenue to come from CBA, once the Apsara Mini Phase 1A commenced production.

In an update in March, however, KrisEnergy said the five development wells "appear less productive and continuous in nature" than expected, compared with results from the original appraisal wells.

These "disappointing results" have not improved since, the company said in its update on Tuesday.

KrisEnergy devised a restructuring plan after its revenue took a hit from lower oil prices and lower sales in 2019. As at June 30, 2019, total debt on the group's balance sheet was US$476.8 million, while gearing stood at 110.8 per cent.

KrisEnergy shares last traded at S$0.03 before suspension in August 2019.

Units of Keppel Corp closed S$5.45 on Tuesday, down 1.27 per cent, or seven Singapore cents.