By MARK RAO
Reach Energy Bhd aims to increase production for its Kazakhstan oil eld to as high as 5,000 barrels of oil per day by year-end.
The company said its 60%- owned Palaeontol BV — which owns Emir-Oil LLP — operates 14 producing wells with an average output of 3,301 barrels of oil per day and 5.6 million standard cu ft of gas per day.
“Reach Energy will continue to play a proactive role towards the development of Emir-Oil fields, especially in the optimisation of near-term
production growth through existing successful field development plans and application of new technologies,” the company said in a statement last week.
It added that Reach Energy — the second special-purpose acquisition company in Malaysia — completed the acquisition of Palaeontol BV in November last year, and plans to increase production to between 4,000 and 5,000 barrels of oil per day by the end of 2017.
Reach Energy CEO Shahul Hamid Mohd Ismail said that oil price dynamics will continue to remain uncertain and volatile — oil prices have slumped to its lowest since Nov 14, 2016, standing at US$44.43 (RM191.05) per barrel on June 21 this year as the industry struggles with oversupply.
“However, as most projections including the World Bank’s, indicate that oil price is on the path to recovery, we believe that our investment in Kazakhstan’s oil and gas (O&G) industry will prove beneficial to our shareholders in the long run,” he said in the same statement.
“The country’s exports will likely increase in the near future, following the commencement of production at the Kashagan field and expansions at the Tengiz and Karachaganak fields.”
Reach Energy posted a net loss of RM17.76 million for its first-quarter ended March 31 this year with revenues of RM44.62 million from crude O&G sales.
Meanwhile, the O&G company is expected to raise fresh funds to compensate for the capital shortfall it incurred,
whereby the company returned RM138.51 million in cash to dissenting shareholders who voted against the qualifying acquisition of Palaeontol BV late last year.
Its private placement of new shares in the company — which is expected to raise some RM180 million in gross proceeds — has since been delayed to Aug 22 this year, after receiving approval from the Securities Commission Malaysia.
Shahul Hamid said Reach Energy will maintain a robust balance sheet going forward, while maximising existing operational efficiency to secure strong cashflow.
“Hence, our attention and resources are focused on developing our O&G producing asset, Emir-Oil, to capitalise its full potential,” he said.