Singapore-based oil and gas company Loyz Energy has signed a $65m agreement with Carnarvon’s Thailand subsidiary to acquire a stake in its onshore oil-producing concessions.
Loyz will secure a 20% stake in three onshore concessions located in Thailand’s Phetchabun basin, SW1, L44/43 and L33/43. The concessions currently have a combined production capacity of around 1,200 barrels of oil per day (bopd) to 1,400 bopd.
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The operator plans to drill 15 new wells in the three concessions. So far this year only three wells were drilled and found to produce oil, with testing results pending.
The remaining wells are expected to be drilled within the next 12 months. The company expects the production rate to rise to 3,000 bopd by June and 5,000 bopd by December.
Loyz will pay $33m on completion, while up to $32m will be paid annually at the rate of 12% of the buyer’s future revenue, to a limit of $10m per annum.
Loyz Energy managing director Adrian Lee said that the latest deal is the company’s first foray into producing concessions, marking a turning point for the group.
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By GlobalData"As soon as the agreement is completed, Loyz will enjoy immediate returns and positive cash flows from the producing wells at the three concessions, while seeing significant growth potential from exploration and improved production from existing operations," Lee added.
Based on Chapman Petroleum Engineering’s 31 December 2012 reserve report, the concessions have 29.3 million barrels of oil reserves. Loyz Energy’s 20% interest over the 20-year concession period equates to 5.87 million barrels of oil.
