Loyz Energy acquires stakes in Carnarvon Thailand oil concessions
May 07, 2014 00:00 By The Nation 3,232 Viewed
Loyz Energy, a Singapore-based upstream energy group, has completed its purchase of stakes in three onshore petroleum concessions in Thailand.
In February, the group’s wholly owned subsidiary Loyz Thailand Oil entered an agreement with Carnarvon Thailand to acquire 20 per cent of the three producing concessions – SW1, L44/43 and L33/43 – in the Phetchabun Basin, which lies about 300 kilometres north of Bangkok.
Carnarvon Thailand is a wholly owned subsidiary of Carnarvon Petroleum, an oil and gas exploration company listed on the Australian Securities Exchange.
Now that the transaction has been completed for US$65 million (Bt2.1 billion), the group expects immediate returns from the producing wells at the concessions, earning positive cash flows with effect as of April 1.
“From the outset, we have set our sights on acquiring choice assets that would ultimately provide the group with a robust revenue stream. These assets already include exploration concessions that offer significant growth potential,” managing director Adrian Lee said.
“With this latest deal, we have secured our very first producing concessions, marking an exciting new chapter for Loyz. Moreover, the recurring income derived from these fields will enable us to boost production at our other operations while helping to fuel further exploration initiatives,” he said.
The company says it will continue to seek out and acquire other strategic assets designed to enhance its portfolio and lock in new revenue streams.
The Thai concessions are producing around 3,000 barrels of oil per day – a significant increase from the 1,200bopd achieved in February. Based on the field development plans in place, Loyz expects the rate to rise even further, reaching 4,000bopd by this month.
A new drilling programme for 15 wells has been put in place for the concessions. Of the three new wells drilled so far, all have produced oil shows, and the test results are pending.
Loyz expects the remaining 12 wells to be drilled within seven months, which should significantly jack up daily production. The cash flows from their production are expected to fund the entire drilling programme.
The estimated 2P1 oil reserves of the three concessions combined are 29.6 million barrels, based on the independent qualified person’s report dated January 1 prepared by Chapman Petroleum Engineering.
Based on its 20-per-cent interest, the group is entitled to 5.92 million barrels of oil over the 20-year concession. This output would potentially generate an undiscounted cash flow of about $144 million, markedly strengthening the group’s balance sheet.
Of the $65-million consideration, $33 million will be paid in cash and the remaining $32 million via future royalty payments based on revenues generated by the producing fields in the Thai concessions.