RE:This production decline killed KrisEnergyKE was in financial trouble in 2016 due to low oil prices.
Its majority shareholder, Keppel, along with First Reserve and M Stanley kept the Company afloat by restructuring it, changing management and financing it.
Examining it's financials, it becomes obvious that Block A in offshore Cambodia was too large for KE to take on at oil prices of $50-$60 .
Much lower recoveries from the pilot wells was the long delayed death knell.
Keppel has first rights to KE assets owing to its $108 loan receivable due from KE
Valeura not committed signifucant capital for these initial two acquisitions.
We paid only initial cash consideration of $3.1-million (U.S.), for Wassana which includes the purchase price and compensation for maintenance and administrative costs incurred since the effective date, as adjusted for working capital.
Valeura will pay contingent consideration of $2-million (U.S.) 90 days after first oil has been delivered from the next infill development drilling program on the Wassana field, notionally planned for Q2 2023.
Further contingent consideration of $5-million (U.S.) will become due 90 days after first production through a permanent production facility on the Rossukon field.
Through the MOPU purchase, also out of receivership, the SPV will acquire the MOPU Ingenium for a total consideration of $9.2-million (U.S.), which is expected to be paid in instalments over 14 months.
So these are very modest outlays of our cash ( $3.1 m ) with the rest icontingent consideration and deferred payments for through cash flows generated from the assets.
Also, I see nothing wrong with employing As part of the acquisition, to employ the seller's Thailand work force, comprising approximately 30 individuals. This is expected to add a capable and experienced local operating unit to Valeura, as well as an office in Bangkok.
Separately, through the Panthera agreement, the SPV will engage individuals from the Panthera organization to fill key regional leadership roles. These individuals were not part of the original KE team and have direct experience with the assets being acquired and will form the core of the regional leadership team.
One must remember that other assets are on the agenda along with the possibility that Thrace Deeps will find a dancing partner this year.
That, and newer assets which be acquired may require the full attention of current management .
Its not unreasonable to assume that more asset news will be delivered this month in time for the proxy agenda for the June 23 AGM..