Singapore’s KrisEnergy, which is on the verge of collapse, has received a disappointing performance update on its Apsara oil field offshore Cambodia. The field was the financially crippled Singapore-listed company’s last hope to prevent it from going bust.
“The independent review of the Apsara field’s performance by third-party petroleum engineering consultant, Netherland, Sewell & Associates, Inc. (“NSAI”) concluded that the estimated ultimate recovery from the five development wells is likely to be a small fraction of the pre-development estimates primarily due to significantly lower volume of hydrocarbon-in-place connected to the wells and the geological complexity resulting in
smaller oil accumulations,” KrisEnergy said yesterday.
KrisEnergy said “it is evaluating if there are any reasonable remedial actions to undertake in order to try and improve production rates, such remedial action has limited potential to increase well productivity, if at all, and is not expected to materially improve total oil recovery due to the fixed configuration of the subsurface reservoirs.”
Hopefully, KrisEnergy will publicly release the latest report. “KrisEnergy and stakeholders should get a second qualified persons assessment, as NSAI did the prior reports upon which we assume KrisEnergy based their development decisions, or perhaps ignored,” an industry analyst that tracks the company told Energy Voice.
Significantly, it should come as no surprise that the frontier basin in Cambodia disappointed, as Energy Voice reported earlier this month. Some industry watchers believe KrisEnergy already knew that the Apsara oil development about 160km off Cambodia’s coast in the Gulf of Thailand would disappoint.
“Despite the recovery in oil prices, the disappointing recovery expected from Apsara production will significantly reduce revenues generated from the development and therefore further deteriorate the company’s financial condition and its ability to service the Cambodia Block A project financing loan from Kepinvest Singapore Pte. Ltd. and other obligations and expenditure,” added KrisEnergy.
Earlier this month, KrisEnergy said that because of Apsara’s poor production “the company’s restructuring plan as described in its previous announcements…is no longer viable”.
The company’s largest shareholder Keppel Corporation in response said that no alternative restructuring plan has been offered to Keppel, and the revolving credit facility granted by DBS Bank to KrisEnergy – to which Keppel had provided a guarantee via a bilateral contract with DBS – would not be amended and extended.
Read more coverage on KrisEnergy from Energy Voice:
Vultures start to circle Singapore’s KrisEnergy
Shareholders ready to rage at Singapore’s KrisEnergy
KrisEnergy on verge of collapse as Cambodia bet backfires