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KrisEnergy signs binding offer letter for sale of Andaman II production sharing contract

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Oilfield Technology,

KrisEnergy Ltd. has accepted a binding letter of offer by a major international oil and gas company for the disposal of a 30% non-operated working interest in the Andaman II production sharing contract (PSC) in the Malacca Strait, Indonesia.

The binding letter of offer for the Disposal was accepted after taking into consideration the future exploration cost and risks associated with deepwater activities. The Board believes it is more prudent to allocate KrisEnergy’s limited capital to funding near-term development. Completion under the Disposal including its terms is subject to inter alia obtaining all necessary approvals from the Government of Indonesia for the assignment of the working interest and the satisfactory completion of due diligence by the intended purchaser. The long stop date for the Disposal is 31 March 2020. The terms of the Disposal set out in the letter of offer are subject to certain assumptions and the execution and delivery of a definitive sale and purchase agreement and the consideration for the Disposal will be payable only upon completion.

The Andaman II PSC is an exploration block over the North Sumatra Basin covering an area of 7400 km2. The Disposal is in line with the Group’s risk mitigation, intention to reduce future exposure to exploration capital expenditure and strategy to focus its limited financial resources on optimising operations at its existing producing assets in Bangladesh and the Gulf of Thailand and progressing the development of the Apsara oil field in Cambodia block A. The Disposal is in the Company’s ordinary course of business and does not change the Company’s risk profile.

Due to confidentiality obligations and the conditional nature of the Disposal, the identity of the intended purchaser and the purchase price cannot be disclosed at this time but the Company will make such disclosure at the appropriate time.

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