Production from the Apsara field, Cambodia's first producing offshore oil field, has been below expectations, and will almost certainly not meet the pre-development forecast of peak production of 7,500 bopd, according to KrisEnergy, the operator of the project. The field's underperformance will also affect KrisEnergy's restructuring efforts.
KrisEnergy, which brought the offshore oil field online in December 2020, had expected the field to provide the cashflow necessary to fund the ongoing operations of the group, however, results from the wells brought online so far are not what was expected.
As at 30 March 2021, the gross production rate at the Apsara field was 2,493 barrels of oil per day (“bopd”) and the average gross production rate for the field for the 23 February 2021 to 30 March 2021 period was 2,883 bopd, KrisEnergy said.
The Apsara oil field started production from a single well, A-01D, on 28 December 2020. Four additional wells were brought on stream since then.
The Apsara Mini Phase 1A has been developed as an initial small-scale project in order to observe and appraise reservoir performance in the previously unproduced Khmer Basin and collect vital production and subsurface data to determine the long-term potential and value of the Apsara
area in Block A.
"To date, the highest production rate achieved at the Apsara field was 3,534 bopd on 27 March 2021. Based on production rates and pressure behavior for individual well performance in the first 36 days since all five wells went online, the Company’s preliminary analysis indicates that the reservoirs encountered in the five development wells appear less productive and continuous in nature than expected compared with the results from the original appraisal wells," KrisEnergy said Wednesday adding that work is ongoing to evaluate the results and to formulate future plans.
"Consequently, the pre-development forecast of peak production of 7,500 bopd will not be achievable for Apsara Mini Phase 1A. In line with lower production rates, preliminary observations also indicate that the ultimate recovery from the five development wells is likely to be significantly lower than predevelopment expectations as the limited continuity of the reservoirs encountered will decrease the original oil-in-place (“OOIP”) estimates associated with the producing wells," KrisEnergy said.
"The company continues to review all data to test its internal assessments. A third-party petroleum engineering consultant, Netherland, Sewell & Associates, Inc. (“NSAI”), will be independently assessing the ultimate recovery from the current five development wells. NSAI’s initial review is
expected to conclude in April 2021," the company said.
Material uncertainty
According to KrisEnergy, it restructuring exercise was designed around the Apsara Mini Phase 1A development, which was expected to provide the cashflow necessary to fund the ongoing operations of the Group.
"Given the significantly lower estimated ultimate recovery and cashflow from the Apsara Mini Phase 1A development, material uncertainty exists over the Group’s ability to complete the Restructuring Exercise and to continue as a going concern," KrisEnergy said.
KrisEnergy’s revolving credit facility with DBS Bank Ltd. will mature on 30 June 2021 and further extension of the maturity date to 30 June 2024 is
subject to satisfaction of certain conditions precedent including the successful completion of all
elements of the Restructuring Exercise.
The company has obtained an extension of the Restructuring Completion Deadline from March 31 2021 to April 16, 2021.
It said on Wednesday that it was is undertaking an assessment of the impact in respect of the group’s activities and the viability of the Restructuring Exercise, "and the next steps given the current circumstances."
"As such, the extraordinary general meeting for shareholders to approve resolutions relating to the Restructuring Exercise, and accordingly, any distribution of the Debt Conversion Shares and the ZCN Exchange Shares, will not occur by 1Q2021," KrisEnergy said.