Due to its inability to pay debts, Singapore’s oil and gas company KrisEnergy has filed a winding-up petition and will be proceeding towards liquidation.
KrisEnergy said last Friday that it was unable to pay its debts based on actual or contingent liabilities and that it would proceed to liquidation.
According to the company, it submitted a winding-up petition to the Grand Court of the Cayman Islands on 4 June.
KrisEnergy added that it took into consideration the significantly lower ultimate recovery and cashflow from the Apsara Mini Phase 1A development resulting in its restructuring exercise being no longer viable.
It also noted the lack of an acceptable alternative restructuring option, the lack of near-term infusion of fresh funds available to the company as well as the fact that liabilities exceed the value of the company’s assets.
The main reason behind the company winding up was the fact that its key asset – the Apsara oilfield – was performing way below expected. The company said as much at the end of May when it reported the gross production rate at the field at 2,493 barrels of oil per day.
The average gross production rate for the field between 23 February 2021 and 30 March 2021 period was 2,883 bopd, not even close to the forecast of 7,500 bopd at peak production.
An independent review of the Apsara in April was putting salt on an open wound as it confirmed that the estimated ultimate recovery from the five development wells will be a small fraction of the pre-development estimates.
This was primarily due to a significantly lower volume of hydrocarbon-in-place connected to the wells and the geological complexity resulting in smaller oil accumulations.
On top of this, KrisEnergy said on Monday that cancelled the total commitments under a revolving credit facility with DBS Bank while it notified Madison Pacific of default under its Cambodia loan facility.
Both DBS and Madison Pacific told KrisEnergy that they are entitled to take enforcement action and intend to do so shortly.