Cash-strapped Singapore-headquartered KrisEnergy has been dealt another blow with the independent review of production from its flagship Apsara oilfield offshore Cambodia.

Consultants Netherland, Sewell & Associates (NSAI) studied performance data of Apsara’s five wells since they were brought on stream on 21 February and its conclusions do not make for happy reading.

NSAI estimated ultimate recovery from the five development wells is likely to be “a small fraction” of pre-development estimates, primarily due to significantly lower volume of hydrocarbons-in-place connected to the wells and the geological complexity resulting in smaller oil accumulations.


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Additional contributing factors for Apsara’s underperformance include data indicating pressure depletion is the dominant recovery mechanism with little to no evidence of water support, resulting in a lower recovery recovery, while lower productivity might be due to formation damage in the oil-bearing zones.

Remedial action considered

KrisEnergy is evaluating whether there are any reasonable remedial actions it could perform to try to improve production rates. However, remedial action has limited potential to increase well productivity - if at all - and is not expected to materially improve total oil recovery due to the fixed configuration of the subsurface reservoirs.

The operator admitted on Wednesday that lower production from the Apsara wells will have “a substantial adverse impact” on revenues from the initial development phase despite the recent recovery in crude prices.

The average price of Brent oil last year was approximately $43 per barrel, the lowest since KrisEnergy was founded in 2009 while, as of 27 April, the average Brent price is $62.12 per barrel.

Disappointing recovery

“Despite the recovery in oil prices, the disappointing recovery expected from Apsara production will significantly reduce revenues generated from the development and therefore further deteriorate the company’s financial condition and its ability to service the Cambodia Block A project financing loan from Kepinvest Singapore and other obligations and expenditure,” cautioned KrisEnergy chief executive Kelvin Tang.

Earlier this month, KrisEnergy said that because of Apsara’s poor production “the company’s restructuring plan as described in its previous no longer viable”.

The company's largest shareholder Keppel Corporation in response said that no alternative restructuring plan has been presented to Keppel, and the revolving credit facility granted by DBS Bank to KrisEnergy - to which Keppel had provided a guarantee via a bilateral contract with DBS - would not be amended and extended.

KrisEnergy on Wednesday added it would keep its stakeholders updated and would make the appropriate announcements as and when there are any material updates or developments.