KrisEnergy sells 30% stake in Indonesia exploration block to BP for US$15m

MAINBOARD-LISTED KrisEnergy has completed the sale of its stake in the Andaman II production sharing contract (PSC) to oil giant BP's subsidiary BP Exploration Operating for US$15 million, it said in a bourse filing on Wednesday.

The upstream oil and gas company previously held a 30 per cent non-operated working interest in the PSC in the Malacca Strait, Indonesia.

A PSC is an agreement between one or more investors and the government, which grants corporates rights over an oilfield for a specific period. 

The Andaman II exploration block over the North Sumatra Basin covers an area of 7,400 square kilometres. 

The purchase price of US$15 million is subject to a retention sum of US$1.7 million which BP may use to offset any payment obligations of KrisEnergy which may become due between April 8, 2020 and Dec 31, 2021.

Pursuant to the terms of KrisEnergy's US$200 million revolving credit facility with DBS bank maturing on June 30, proceeds from the sale will be held in a collection account over which DBS has security. 

Shares of KrisEnergy have been suspended since Aug 14, 2019.