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.

 

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.

THU, JAN 14, 2021 - 7:20 PM

ANNABETH [email protected]@AnnabethLeowBT

KRISENERGY creditors approved its debt restructuring in a court meeting on Thursday, the upstream oil-and-gas company announced in a bourse filing.

 

The company " will now press ahead" with the last two steps of its four-stage restructuring, which involve zero coupon note holders and shareholders, said chief executive Kelvin Tang in the statement.

 

The creditor vote was the second stage, following an earlier move to extend KrisEnergy' s revolving credit facility maturity date to June 30, 2024.

 

Mr Tang called the latest scheme approval " a critical step in the process to reorganise our liabilities and allow the company to operate with a more sustainable capital structure" .

 

KrisEnergy will now apply for the High Court' s sanction of the scheme, and will make necessary announcements in due course, the company added.

 

The scheme resolution passed with the support of creditors, who represented 80.93 per cent of the S$170.7 million in value involved.

Cambodia has begun extracting its first crude oil from fields in the Gulf of Thailand, in a venture between Singapore' s KrisEnergy and the government, both parties said on Tuesday, bringing an end to years of delays.

 

Prime Minister Hun Sen announced the news on social media while KrisEnergy said the concession started production on Monday and would progress in phases once new wells were commissioned and completed.

 

" I... am pleased to inform all Cambodians about the start of Cambodia' s first oil production in the long-awaited Block A," Mr Hun Sen said on his Facebook page.

 

Kelvin Tang, chief executive of KrisEnergy' s Cambodian operations, called the event " an important strategic milestone" for the company.

 

" There has been a steep learning curve for all involved," Mr Tang added in a statement.

 

Cambodia and Singapore-listed KrisEnergy signed a pact in 2017 to develop 3,083 square kilometres of the Khmer basin in the Gulf of Thailand known as Block A.

 

Cambodia has struggled to develop its oil fields as few companies were willing to invest in the area following a global oil price slump in 2014.

 

KrisEnergy, which has been a partner in the project for more than a decade, bought out Chevron Corp' s operating interest in Block A in 2014 for US$65 million.

 

Chevron had found oil in the block in 2004 but failed to strike a development agreement with Cambodia, which has a 5 per cent stake in the venture with KrisEnergy.

 

Earlier, KrisEnergy had anticipated oil production from the Aspara field to start some time last year.

 

On Tuesday it said development of that field would proceed in phases, allowing time to mitigate risks as well as collect and assess data, since the production performance of the basin is unproven.

THE winding-up petition against a key subsidiary of debt-hit oil-and-gas company KrisEnergy will be withdrawn after KrisEnergy, together with four of its business units, on Tuesday reached a US$15.3 million settlement with Rubicon Vantage International and its affiliate.

 

Upon execution of the settlement deed, Rubicon will immediately withdraw the winding-up petition and its statutory demands against KrisEnergy' s wholly owned subsidiary, KrisEnergy (Gulf of Thailand) (KEGOT) in the Cayman Islands.

 

KrisEnergy (Apsara) Company Ltd will enter into a new bareboat charter for the hire of a vessel, Rubicon Vantage, from Rubicon. Rubicon Vantage will be used in the Cambodia Block A Apsara oil field.

 

Rubicon had earlier filed claims against KrisEnergy and KEGOT in relation to a bareboat charterparty dated October 2014. Under Tuesday' s settlement agreement, Rubicon, KrisEnergy and KEGOT will stop all legal action and claims related to this bareboat charter.

 

Rubicon and KEGOT will also apply jointly to the High Court of Justice - the Business and Property Courts of England and Wales to stop legal proceedings in the UK.

Rubicon will not commence any enforcement action in respect of the amount previously awarded by the English High Court in respect of claims under the bareboat charter guarantee.

 

Under the settlement reached on Tuesday, Rubicon and its affiliate Maritime International Services will have to file a proof of debt for the US$15.3 million settlement sum in the scheme of arrangement pursued by KrisEnergy in the Singapore High Court, where it is seeking to restructure debts of US$476.8 million.

 

Rubicon and Maritime have agreed that the filing of the proof of debt and any distribution shall constitute full and final settlement.

 

THE Singapore High Court has granted leave for debt-ridden KrisEnergy to convene a meeting of its scheme creditors within three months from Nov 16.

 

The mainboard-listed upstream oil and gas firm' s debt moratorium has also been extended again, this time to Jan 16, 2021. It was first granted in September last year.

 

KrisEnergy' s creditors include Keppel Shipyard, DBS, HSBC, Standard Chartered Bank, zero-coupon noteholders, holders of its S$130 million senior unsecured notes due 2022, holders of its S$200 million senior unsecured notes due 2023, Rubicon Vantage International and Maritime International Services.

 

At the scheme meeting, only scheme creditors in a contractual relationship with KrisEnergy will be entitled to vote by appointing the chairman of the meeting as proxy. The Central Depository account holders who invested in the due-2022 and due-2023 notes will also be able to nominate the chairman to vote at the meeting.

 

KrisEnergy, seeking to restructure debts to the tune of US$476.8 million, has proposed a debt-to-equity swap. The shareholding structure after the restructuring will see unsecured creditors owning a 46.2 per cent stake and the zero-coupon noteholders holding 43.8 per cent.

 

The firm last month sought the court' s permission to convene the meeting and another extension to its moratorium.

 

Mainboard-listed conglomerate Keppel Corp owns a 40 per cent stake in KrisEnergy.

 

DEBT-LADEN KrisEnergy has applied for permission to convene a meeting of the scheme creditors as well as an extension to its debt moratorium for two months, the upstream oil and gas company said in a regulatory filing on Friday.

 

The High Court will hear these applications on Oct 30, and has directed that whoever objects to these requests is to file an affidavit by Oct 22, 4pm.

 

KrisEnergy said that the meeting of the scheme creditors will allow only those scheme creditors in a contractual relationship with the company to vote by appointing the chairman of the meeting.

 

The Central Depository (CDP) account holders who invested in the S$130,000,000 senior unsecured notes due 2022 and the S$200,000,000 senior unsecured notes due 2023 will also be entitled to nominate the chairman for the purposes of voting at the meeting.

 

KrisEnergy has proposed a debt-to-equity swop to settle its liabilities, with the shareholding structure post restructuring to see unsecured creditors owning 46.2 per cent and the zero coupon note holders holding 43.8 per cent.

 

Also, the company is seeking a fifth extension to its debt moratorium, which was first granted in September last year and was last extended to Oct 27.

 

It is seeking protection from its creditors, which include DBS Bank, Keppel Shipyard, Rubicon Vantage International and holders of the various notes the company has issued, as it tries to restructure debts to the tune of US$476.8 million.

 

Mainboard-listed Keppel Corporation owns a 40 per cent stake in KrisEnergy.