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KrisEnergy secures Chevron acreage offshore Cambodia

11th August 2014

KrisEnergy has entered into an agreement with Chevron Global Energy to acquire the entire issued share capital of Chevron Overseas Petroleum (Cambodia) Limited (Chevron Cambodia), which holds a 30 per cent participating interest in, and operatorship of, Cambodia Block A

KrisEnergy secures Chevron acreage offshore Cambodia
Joint-venture partners, MOECO Cambodia Co. Ltd (MOECO) and GS Energy Corporation (GS Energy), have approved the transaction

Cambodia Block A lies offshore Cambodia where extensive exploration work in the licence area since the mid-2000s resulted in the Apsara oil discovery for which a production permit application (PPA) was submitted in 2010 and updated in 2012. The contract area covers 4,709 square kilometres over the Khmer Basin in the Gulf of Thailand where water depths range from 50 metres to 80 metres.

“We farmed into Cambodia Block A in 2010 and we believe it has all the makings of a significant oil production area,” said Richard Lorentz, director of business development at KrisEnergy. “Chevron, with its experience in the Gulf of Thailand, has done some tremendous work in Block A and we hope that with the KrisEnergy entity now holding operatorship, we will be able to steer the Apsara development plans forward to first production as quickly and cost effectively as possible. We will give this project our full focus as we work with the Cambodian authorities to finalise the Apsara PPA.”

The total consideration for the transaction is USD 65m subject to a working capital adjustment. Chevron Cambodia will be renamed to KrisEnergy (Apsara) once an acknowledgment is received for the transaction by the government of Cambodia.

Joint-venture partners, MOECO Cambodia Co. Ltd (MOECO) and GS Energy Corporation (“GS Energy”), have approved the transaction.

Chevron Cambodia’s 30 per cent participating interest in Cambodia Block A will reduce to 28.5 per cent once the Cambodia National Petroleum Authority (CNPA) or its successor completes its acquisition of a five per cent participating interest in the block.

Pre-transaction, KrisEnergy held an indirect 25 per cent participating interest in Cambodia Block A, which will reduce to 23.75 per cent post transfer to CNPA. Upon completion of the acquisition of Chevron Cambodia, KrisEnergy will indirectly hold 52.25 per cent participating interest in the development block.

Cambodia historically has no oil or gas production and the Apsara PPA is the first to be evaluated by the Ministry of Mines and Energy (successor petroleum regulator to CNPA). KrisEnergy, along with the joint-venture partners, intends to work with the Cambodian authorities to agree the terms and conditions of the PPA before declaring final investment decision for the Apsara development.

Phase one of the Apsara project includes 24 development wells from a single platform with oil processed then stored in an offshore storage vessel prior to commercial sales. This concept is similar to other fields in the Gulf of Thailand. Production from the initial single platform is expected to peak at approximately 10,000 barrels of oil per day.

Outside of the immediate Apsara development area, a further six structural trends have been identified and mapped as a result of 3D seismic interpretation or exploration drilling. Two additional future development phases in the Apsara area on the discoveries made to date may involve the installation of up to nine platforms, each with 24 wells. Further development across the entire licence area could involve up to 44 production platforms in seven separate producing areas.

The other participants in Cambodia Block A are MOECO with a 28.5 per cent working interest, GS Energy with 14.25 per cent and CNPA with 5 per cent once formal transfer is approved.

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