Questions from Cheryl Lee, UBS
Hi everyone, evening. Thanks for taking my question.
With regard to KrisEnergy and its worsening situation, you have already announced
the various exposures which are relevant to Keppel, but could you also help us
understand in the scenario that KrisEnergy is perhaps liquidated, what are Keppel’s
various claim ranks vs. the other creditors, and also the circumstances under which
Keppel will be called to make good for the loan for which you are the guarantor?

LCH: I will answer the first question, and then I will ask Hon Chew to follow up on the RCF
(revolving credit facility).
Of course, I cannot comment on behalf of KrisEnergy, but since this has been raised, let me
take a step back and provide Keppel’s perspective on KrisEnergy. Keppel Corporation
invested in KrisEnergy in 2012, at a time when Brent crude was over US$100. At that time,
we saw long-term potential in the portfolio of assets that they had. We also saw opportunities
for Keppel O&M to gain better insights into the upstream business, and potential opportunities
for collaboration.
KrisEnergy started facing problems in 2014, when most of you who are in the oil and gas
sector will remember, oil price fell, and shale oil emerged as the new swing producer. We have
subsequently supported KrisEnergy to safeguard our investment in the company, including
during the consensual restructuring exercise which commenced in 2019.
Every step of the way, we had exercised caution to manage our risk. For example, Keppel’s
guarantee for the RCF was backed by comprehensive security over KrisEnergy’s assets. So
to answer your first question, we have the main security over their assets.
More recently, when KrisEnergy proposed the development of its key asset, Cambodia Block
A, or CBA, we agreed to support the development. But when the management of KrisEnergy
first came to us, it was for a much larger project. I think as part of our analysis, together with
our advisor, we scaled it down considerably. This became what they called CBA Mini 1A. The
forecasted production at its peak, as assessed by KrisEnergy then and validated by industry
leading third-party petroleum engineers, was about 7,500 barrels a day. Unfortunately, the
actual CBA production is much lower now. If the actual production was in line with forecasts
or within a reasonable expected range, CBA could have formed the basis of a successful
consensual restructuring. This would have provided the best outcome for Keppel and the other
stakeholders.
As you have heard, regrettably, KrisEnergy recently announced that due to the significant
underperformance of CBA, contrary to earlier projections, the consensual restructuring is no
longer viable. Even if the restructuring exercise was completed, there was material uncertainty
over KrisEnergy’s ability to continue as a going concern.
Sometimes even with the best processes and making carefully considered risk reward
decisions at each stage, it may still not result in a good outcome. This is not uncommon in
offshore oil and gas exploration and production. Thus, whether KrisEnergy is able to continue
as a going concern will have a material impact on Keppel’s carrying value. This is something
that we are working very closely with our third-party advisors to determine.

CHC: On your question on the RCF with DBS Bank; as we have disclosed previously, there
is a standing RPA, or risk participation agreement, where Keppel will step into DBS’ shoes in
this instance. As you know, the RCF is secured, so we also benefit from the security that Chin
Hua mentioned earlier. So we have security over the assets of KrisEnergy for the RCF as well.

Can I clarify, in terms of cashflow, it might mean that you would have to compensate
DBS, but you have a claim on the assets? Is that right?
CHC: That is correct, and that is as disclosed in our announcement two days ago.

And just to double check, in terms of the P&L carrying value, how do we think about
potential downside on a P&L basis?

CHC: In our announcement two days ago, we have stated what our full exposure is, including
the carrying value of our investments, loan receivable, zero-coupon bonds, the contract asset,
and the RCF. That is the maximum exposure. But as Chin Hua has mentioned, at this point,
we are still unable to give a full financial impact, given that the NSAI report is yet to be finalised.
Once that is finalised and disclosed by KrisEnergy, we will have to analyse the impact of the
NSAI report on the cashflows from Cambodia Block A, Mini Phase 1A, and also any impact of
the failure of the restructuring on KrisEnergy’s other assets. Once that is determined, then we
are able to ascertain the financial impacts.

For sure and certain Keppel Corp, Krisenergy's effective parent, are already working to limit the X factor in the $X00 million dollar write-off their business will proudly wear on this year's bottom line.
This excerpt does not mean much to the average reader - just an indication that planning for KrisEnergy's funeral, and the wake, is already well under way.

Crunch time - they hate that. (especially in Singapore) And have paid millions and millions of lost dollars to continue the charade in their desperation to avoid the financial reality finally showing up in bottom-line black and white.

Keppel Corporation 1Q 2021 Business Update
Media & Analysts Conference Call Transcript
22 April 2021, 6.00pm
LCH Loh Chin Hua, CEO of Keppel Corporation
CHC Chan Hon Chew, CFO of Keppel Corporation
CT Christina Tan, CEO of Keppel Capital
CO Chris Ong, CEO of Keppel Offshore & Marine
LL Louis Lim, CEO of Keppel Land
CL Cindy Lim, CEO of Keppel Infrastructure
TP Thomas Pang, CEO of Keppel Telecommunications & Transportation
MSM Manjot Singh Mann, CEO of M1

Opening remarks by Loh Chin Hua, CEO of Keppel Corporation
Good evening, analysts and friends from the media.
This is the second time we are having a voluntary business update since Keppel Corporation
moved to semi-annual reporting of financial results.
We are not sharing our financial results, but we have provided key updates and metrics across
our businesses

Questions from Cheryl Lee, UBS
Hi everyone, evening. Thanks for taking my question.

With regard to KrisEnergy and its worsening situation, you have already announced
the various exposures which are relevant to Keppel, but could you also help us
understand in the scenario that KrisEnergy is perhaps liquidated, what are Keppel’s
various claim ranks vs. the other creditors, and also the circumstances under which
Keppel will be called to make good for the loan for which you are the guarantor?

LCH: I will answer the first question, and then I will ask Hon Chew to follow up on the RCF
(revolving credit facility).
Of course, I cannot comment on behalf of KrisEnergy, but since this has been raised, let me
take a step back and provide Keppel’s perspective on KrisEnergy. Keppel Corporation
invested in KrisEnergy in 2012, at a time when Brent crude was over US$100. At that time,
we saw long-term potential in the portfolio of assets that they had. We also saw opportunities
for Keppel O&M to gain better insights into the upstream business, and potential opportunities
for collaboration.
KrisEnergy started facing problems in 2014, when most of you who are in the oil and gas
sector will remember, oil price fell, and shale oil emerged as the new swing producer. We have
subsequently supported KrisEnergy to safeguard our investment in the company, including
during the consensual restructuring exercise which commenced in 2019.
Every step of the way, we had exercised caution to manage our risk. For example, Keppel’s
guarantee for the RCF was backed by comprehensive security over KrisEnergy’s assets. So
to answer your first question, we have the main security over their assets.
More recently, when KrisEnergy proposed the development of its key asset, Cambodia Block
A, or CBA, we agreed to support the development. But when the management of KrisEnergy
first came to us, it was for a much larger project. I think as part of our analysis, together with
our advisor, we scaled it down considerably. This became what they called CBA Mini 1A. The
forecasted production at its peak, as assessed by KrisEnergy then and validated by industry
leading third-party petroleum engineers, was about 7,500 barrels a day. Unfortunately, the
actual CBA production is much lower now. If the actual production was in line with forecasts
or within a reasonable expected range, CBA could have formed the basis of a successful
consensual restructuring. This would have provided the best outcome for Keppel and the other
stakeholders.
As you have heard, regrettably, KrisEnergy recently announced that due to the significant
underperformance of CBA, contrary to earlier projections, the consensual restructuring is no
longer viable. Even if the restructuring exercise was completed, there was material uncertainty
over KrisEnergy’s ability to continue as a going concern.
Sometimes even with the best processes and making carefully considered risk reward
decisions at each stage, it may still not result in a good outcome. This is not uncommon in
offshore oil and gas exploration and production. Thus, whether KrisEnergy is able to continue
as a going concern will have a material impact on Keppel’s carrying value. This is something
that we are working very closely with our third-party advisors to determine.
CHC: On your question on the RCF with DBS Bank; as we have disclosed previously, there
is a standing RPA, or risk participation agreement, where Keppel will step into DBS’ shoes in
this instance. As you know, the RCF is secured, so we also benefit from the security that Chin
Hua mentioned earlier. So we have security over the assets of KrisEnergy for the RCF as well.

Can I clarify, in terms of cashflow, it might mean that you would have to compensate
DBS, but you have a claim on the assets? Is that right?
CHC: That is correct, and that is as disclosed in our announcement two days ago.


And just to double check, in terms of the P&L carrying value, how do we think about
potential downside on a P&L basis?
CHC: In our announcement two days ago, we have stated what our full exposure is, including
the carrying value of our investments, loan receivable, zero-coupon bonds, the contract asset,
and the RCF. That is the maximum exposure. But as Chin Hua has mentioned, at this point,
we are still unable to give a full financial impact, given that the NSAI report is yet to be finalised.
Once that is finalised and disclosed by KrisEnergy, we will have to analyse the impact of the
NSAI report on the cashflows from Cambodia Block A, Mini Phase 1A, and also any impact of
the failure of the restructuring on KrisEnergy’s other assets. Once that is determined, then we
are able to ascertain the financial impacts.

Anybody want to lease an offshore oil rig?
3 for a dollar/year in SEA these days.

Or you can have as many as you like for free - as long as you sign the papers to take the bloody things off our hands.

Stock picks for the 2020's

Hot Rocks Special
Shift all your O & G assets into Law.

For those looking for sure stable returns - Throw the whole pot into vulture commercial law firms specialising in bankruptcies in the O&G sector.
Always a stable and reliable niche - but will be going absolutely like gangbusters drinking skyrockets for the next few years.

For high stakes, winner take all, investors - O&G sector contract law specialists.
Particularly those specialising in the finer nitpickings of infrastructure and equipment leasing contracts. And their financing.

NB - Specialist law firms that deal with disputes with national governments over who pays the capping and clean-up costs when all these wildcatters desert their fast sinking ships tend not to get paid.
(and ps, the capping doesn't happen anyway)

How do you spell La La Land?

Kingdom seeks buyers for crude amid discouraging production
May Kunmakara | Publication date 13 May 2021 | 17:11 ICT
Phnom Penh Post

The government and Singaporean oil exploration firm KrisEnergy Ltd are actively working together to find markets for the crude oil produced offshore Cambodia and to plan for further steps in resource development for Block A, according to a senior government official.

The statement came after the media and civil society raised concerns about the Kingdom's ‘failures' in the oil and gas sector due to the lower-than-planned output of the five wells in the Apsara oilfield located in Block A that lies over the Khmer Basin in the Gulf of Cambodia.

The Kingdom extracted its first drop of crude oil on December 28 from the A-01D well – part of the five-well mini-platform featured in KrisEnergy's “Mini-Phase 1A” development.

But a KrisEnergy statement on April 28 cautioned that the reduced production would have a substantial adverse impact on revenue generated from the Mini Phase 1A development, despite a recovery in benchmark oil prices since the lows of 2020 when the Covid-19 pandemic began to emerge.

Ministry of Mines and Energy secretary of state Meng Saktheara said in a May 12 Facebook post that the production capacity of each well was not significantly different from US energy giant Chevron Corp's previous estimates.
(BS. to be polite)

He said the ministry is actively working with a team of KrisEnergy technical experts to secure a market for Cambodian oil and plan the next steps in the development of resources in Block A.
(Plan. ?? what ??)

"Whatever happens to KrisEnergy – be it a deviation from, or according to expectations – it should not be deemed a failure or a blessing for any group of Cambodians.
(No. just bad luck)

“On the other hand, whether the expectations were right or wrong, Cambodia has truly marked a new chapter in history by becoming an oil-producing country and building its national capacity in such an industry,” he said.
(Dreamsville Central)

And addressing critics of the Kingdom's oil and gas sector, he added: “And a number of foreigners – they should not be jealous of Cambodia either, because virtually all countries in the region have been oil producers for a long time."
(and they won't be)

In the midst of economic disruption due to the pandemic, Saktheara said that, as a Cambodian, the announcement of the start of the Kingdom's oil production in end-2020 was a source of great national pride.
(pride - as in the Trumpian sense - empty boasts)

"I have seen a number of civil society groups and NGOs that have been spreading speculation about the large estimated figures. US giant Chevron spent more than 10 years exploring for oil and still could not start production.
(Yes, that is correct. Why??)

“It is clear that the results of Chevron's assessment indicate that Cambodia's initial oil resources are not much, and that Chevron's departure is merely a confirmation to civil society organisations and NGOs of wrongdoing of their inflated figures," he said.
(????????)

Prior to its exit, Chevron planned to extract 7,500 barrels of crude oil per day from 22 wells in an initial development phase, he said, adding that more wells are needed because oil production per well is “very low”.
(maybe when they do the numbers on more wells, include the financial ones)

After Chevron's departure, Singaporean successor KrisEnergy had initially planned for 20 wells, he said.
(Yeeeees, well we know all about KE's grand plans. 360 wells in fact)

But after its parent company ran into financial difficulties and with the onset of the Covid-19 crisis, KrisEnergy opted to commission just five wells to provide performance data to understand the reservoir drive mechanism as a first development phase, and extract the first drop of oil in a timely manner in accordance with the plan set out in the petroleum agreement, he added.
(BS. Keppel is a scrillionairre. It is KrisEnergy itself who is in 2/3 of a billion of unrecoverable debt.
Timely ??? LOL)

"Reducing the number of wells from 22 to five was like a lottery for the company, and it still expected to be able to produce about 7,500 barrels per day, as Chevron originally planned to do with 22 wells.
(BS, read the field report dated April 28 )

"The government and concerned ministries are well aware of this, and so far all government announcements and ministry experts have made it clear that a ‘first drop of oil' is not much, and is not expected to provide the revenue to the national budget that would change the size of the Cambodian economy now, or in the near-term future.
(I concur, in full)

"But this is just the beginning of history in this field for this nation, after a lot of effort and countless challenges," Saktheara said.
(I like an optimist - but sorry - the Block A emperor has no clothes.)

sigh
kick the cat

EPIC FAIL - by those prominent heroes of the western "free press" who are regarded as experts commentators about Cambodian affairs. Absolutely astonishing in the depth of their ignorance - or is it "timidness", or comprise?

Stenographers these days, not even hacks.

The Business Times
today

KrisEnergy restructuring plan no longer viable as Apsara oil field shows 'disappointing' results

The continued "disappointing" results of KrisEnergy's Apsara oil field in Cambodian oil concession Block A means its restructuring plan is no longer viable, the troubled oil and gas group said in a bourse filing on Tuesday.

There remains "material uncertainty" over the company's ability to continue as a going concern.

KrisEnergy also said it has not been able to propose an alternative restructuring plan to DBS, the provider of a US$200 million revolving credit facility and Keppel Corporation Limited, which holds the key economic risk in the revolving credit facility.

Therefore, the revolving credit facility will not be extended as stipulated conditions have not been fulfilled.

The Apsara field lies over the Khmer Basin, an unproduced geological basin in Cambodian maritime waters in the Gulf of Thailand. The current development phase, which KrisEnergy calls Mini Phase 1A, was an initial small-scale project aimed at appraising reservoir performance in Cambodia Block A (CBA).

The development of CBA formed the basis of KrisEnergy's restructuring as it had expected the bulk of the group's future revenue to come from CBA, once the Apsara Mini Phase 1A commenced production.

In an update in March, however, KrisEnergy said the five development wells "appear less productive and continuous in nature" than expected, compared with results from the original appraisal wells.

These "disappointing results" have not improved since, the company said in its update on Tuesday. (april 18)

Keppel Corporation said it is evaluating the potential financial impact on the values and determining its best course of action to preserve value for shareholders.

Singapore-based KrisEnergy will make its first shipment of crude oil to international markets this month with a batch of up to 300,000 barrels, according to Cheap Sour, director-general of Petroleum at the Ministry of Mines and Energy.

The company said there continued to be “material concerns” that it would not be able to operate as a going concern, indicating the company will likely need to cease operations because of its lack of production in its Cambodian project.

With one of its last lifelines – revolving credit amounting to $200 million from DBS – having been revoked, the company is running out of room to manoeuvre.


lol
Flock Comrades!! 'Gotta hand it to them - these guys have got the Olympic gold medal for manoeuvring.
Pity they didn't have more than blue sky and bullshit to work with. They could have ruled the world.

breaking....

Liquid Gold!
down the plughole. that's it for Kris

KrisEnergy Ltd. submits Winding Up Petition

Singapore, 4 June 2021 – KrisEnergy Ltd. (“KrisEnergy” or the “Company”, and together with its
subsidiaries, the “Group”), an independent upstream oil and gas company, refers to the following
announcements:
1. the announcement dated 31 March 2021 in relation to updates on the Apsara oil field
development and restructuring exercise;
2. the announcement dated 20 April 2021 in relation to further updates on the restructuring
exercise; and
3. the announcement dated 28 April 2021 in relation to updates on the Apsara oil field review
by third-party petroleum engineering consultant, Netherland, Sewell & Associates, Inc.,
(collectively, the “Announcements”).

Further to the Announcements, the Company wishes to announce that the Company is unable to pay
its debts based on actual and/or contingent liabilities and will proceed to liquidation, having taken
into consideration, among others, the following factors:
(a) the Company’s liabilities which exceed the value of the Company’s assets;
(b) the significantly lower ultimate recovery and cashflow from the Apsara Mini Phase 1A
development resulting in the Company’s restructuring exercise being no longer viable;
(c) the lack of an acceptable alternative restructuring option; and
(d) the lack of near-term infusion of fresh funds available to the Company.
Accordingly, the Company has on 4 June 2021 submitted a winding-up petition to the Grand Court of
the Cayman Islands (the “Winding Up Petition”). The hearing date for the Winding Up Petition will be
fixed.
Shareholders, noteholders and potential investors of the Company are advised to read this
announcement and any further announcements by the Company carefully and should exercise
caution when dealing in the Company’s securities. Stakeholders and potential investors who are in
doubt as to the action they should take should consult their stockbrokers, bank managers, solicitors,
accountants or other professional advisors.
BY ORDER OF THE BOARD
Kelvin Tang
Chief Executive Officer and Executive Director

https://krisenergy.com/default/assets/F ... tition.pdf

Monday morning 7th June (or next month)

... huh???
ahh der, oh yeah, KrisEnergy -
Buy
They've got an exciting project already pumping oil in Cambodia...


Cambodian press
Regional press
World biz press
Cambodia's western commentators
O & G industry press
Regional stock market press


spoiler - see post above