KrisEnergy has reached a loan deal with Kepinvest Singapore to assist the company with bringing the Apsara project off Cambodia online on schedule.
KrisEnergy said that the loan would also remove the risk of losing the license. The Apsara project is located in Cambodia’s offshore Block A.
To remind, KrisEnergy agreed on a loan with Kepinvest worth $$87 million in aggregate in April 2020. The loan was aimed for the development of the first phase of Apsara.
The loan was split into two – Facility A of up to $30 million and Facility B up to $57 million. The use of Facility B was subject to lender’s approval.
KrisEnergy, which last month completed construction the Apsara wellhead platform – Cambodia’s first offshore oil platform, said on Wednesday that Kepinvest agreed to an initial utilization of Facility B.
According to the company, Facility A has been fully drawn down and around $10.8 million has been drawn down on Facility B.
In the statement, KrisEnergy stated that the Cambodian government indicated that there would be “serious consequences – financial or otherwise” if the first oil deadline was not met.
If first oil is not achieved by 31 December 2020, such consequences could include the termination of the concession rights for Block A.
“Kepinvest Singapore is providing funding from Facility B to maintain the current development schedule for first oil and avoid any adverse consequences associated with not achieving first oil production by 31 December 2020“, the company added.
KrisEnergy sees Block A as a key asset and is “expected to materially increase the group’s revenue and cash flow once oil production commences”.
Also, it expects Block A to be the highest revenue-generating asset in the company after it is developed and is a key asset for the restructuring of the firm.
KrisEnergy also extended the completion date of its debt restructuring. Namely, Kepinvest agreed to move the date from 30 September to 30 November.
The Mini Phase 1A Apsara development off Cambodia, which is the first phase of potentially several phases, is expected to reach a peak rate of 7,500 barrels of oil per day when online.
The first phase will test reservoir performance and long-term potential of the field. If successful, mean the installation of more facilities for increased production.
Andaman II sale
KrisEnergy further stated that it received cash from BP related to the sale of its stake in the Andaman II production sharing contract in the Malacca Strait, Indonesia.
The Andaman II PSC is an exploration block over the North Sumatra Basin covering an area of 7,400 square kilometres. To remind, KrisEnergy in April said the consideration for the disposal of its Indonesia stake was $15.0 million.
It is worth noting that KrisEnergy exited the Indonesian block to dedicate its resources to the Cambodian project. The cash received from the sale would be applied towards the repayment of the revolving credit facility provided by DBS.