KrisEnergy Bucks the Trend, Continues Projects
Singapore-listed KrisEnergy Ltd. is bucking the low oil price trend and progressing with a number of new field developments in Southeast Asia.
Over in Indonesia, preparation for the engineering, procurement, construction and installation (EPCI) contract is underway for the Lengo field development, while supporting its partners in developing hydrocarbon resources from onshore Block A Aceh.
KrisEnergy is holding up well despite the tough market conditions as it has sufficient funds to progress its projects. Formed in 2009, it has secured 19 contract areas – including 13 as operators – in Bangladesh, Cambodia, Indonesia, Thailand and Vietnam and made more than two dozen hydrocarbon discoveries to date.
In August, KrisEnergy completed a $119.05 million (SGD 169.5 million) renounceable underwritten rights issue, of which 85 percent of the net proceeds of $116.31 million were earmarked for development activities at existing and new fields.
“There is no doubt that 2014 and 2015 have been very challenging for the upstream sector and all the related industries such as rig companies and service providers,” Richard Lorentz, a founding director of KrisEnergy and director of Business Development, told Rigzone.
“However, at the beginning of 2014 we started to adjust our capital structure to strengthen our balance sheet. That meant the redemption of a high-yield U.S. bond followed by the issue of two Singapore dollar-denominated bonds later in the year, which effectively halved our cost of debt,” he added.
“The bonds, together with the rights issue this year, mean that our gearing is now around a manageable 35 percent and we have been able to focus on the job at hand to bring on stream the two near-term oil developments in the Gulf of Thailand. These are now producing and we expect to complete development drilling by the end of 2015 when we should reach plateau production at both fields of around 10,000 barrels of oil per day (bopd) each,” Lorentz explained.
Optimism about KrisEnergy’s prospect have drawn strong support from the investor community, including Singapore’s Keppel Corporation Ltd., which holds 38 percent interest in the firm.
Busy in Core Growth Area
KrisEnergy has been active in its core growth area in the Gulf of Thailand. It submitted a development plan for the Rossukon area in Block G6/48 in June after drilling two successful exploration wells and two sidetracks in the first half of this year.
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