KrisEnergy divests interest in Block A PSC

SGX-listed upstream oil and gas company KrisEnergy Ltd. announced Wednesday it has reduced its working interest in the Block A production sharing contract in Aceh Province to 15 percent in alignment with its revised business plan to reduce future capital expenditure while maintaining exposure to a high-value gas development in Indonesia.

The company said in a statement that proceeds from the transaction will be applied towards funding KrisEnergy?s share of the capital expenditure for the Block A gas development.

?The operator of Block A Aceh, PT Medco E&P Malaka, has acquired 26.6666 percent of KrisEnergy?s working interest and increased its holding to 85 percent. The transaction is pending approvals from the Government of Indonesia and the Government of Aceh,? the statement said.

Jeffrey S. MacDonald, KrisEnergy?s Interim Chief Executive Officer, commented: ?This farm-out is in line with our recently announced revised business plan to reduce exposure to contract areas where we have a high working interest in order to mitigate risk and reduce future capital expenditure commitments given the continued volatility in oil and gas markets. However, we remain a partner in Block A Aceh and will benefit from long-term revenues and cash flow once the gas fields are developed and on stream.?

Block A PSC covers 1,680 sq. km and is located onshore Sumatra in the semi-autonomous region of Aceh.

It contains several gas condensate discoveries including the Alur Rambong, Alur Siwah and Julu Rayeu fields, which were approved for development in 2007. A gas sales agreement was signed in January 2015 for a daily contracted quantity of 58 billion British thermal units.

Editing by Reiner Simanjuntak