The Malaysian Reserve

Sapura Energy to tap offshore assets in Aussie

www.sapuraenergy.com Inter-Pacific Securities’ Pong says PNB’s decision to subscribe to the rights issue and warrants was expected based on the current O&G climate (www.sapuraenergy.com)

By MARK RAO / Photo courtesy: SAPURA ENERGY

Sapura Energy Bhd made its first venture into Australia’s upstream oil and gas (O&G) business after its wholly owned unit Sapura Upstream Sdn Bhd agreed to acquire a 70% stake in three exploration blocks off Western Australia.

Under the farm-in agreements inked with Finder Exploration Pte Ltd, Sapura Upstream will acquire interests in blocks EP 483 & TP/25, WA-412-P and AC/P 61, which are located in the North West Shelf O&G province in Australia.

Pending regulatory approvals, Sapura Upstream and Finder will drill two explorations wells in the Carnarvon Basin permits (EP 483 & TP/25 and WA-412-P) from 2019 to 2020, while acquiring seismic data in the AC/P61 permit in 2019.

The works will be undertaken on a 70:30 basis between Sapura Upstream and Finder respectively.

Operating as the upstream arm of Sapura Energy, Sapura Upstream commenced gas production and discovered seven trillion cu ft of gas in the SK310 B15 and SK408 fields respectively off Sarawak.

The upstream vehicle is also present in New Zealand and the Gulf of Mexico via a series of farm-in agreements and blocks respectively.

On Aug 24 this year, Sapura Energy announced a RM4 billion rights issue aimed at repaying group borrowings and strengthening its financial position.

Its three businesses comprise exploration and production (E&P), drilling, and engineering and construction for the O&G industry.

The proposed cash call is in view of the prospective listing of its E&P business, as well as a possible partnership for the drilling division.

It involves the issuance of 9.99 billion ordinary shares and 2.4 billion Islamic redeem-able convertible preference shares at 30 sen and 41 sen a piece respectively, while the gross proceeds will finance 24.1% of the group’s RM16.4 billion in borrowings.

As the company’s major shareholder, president and group CEO Tan Sri Shahril Shamsuddin has agreed to take up his entitlement via his private vehicle Sapura Technology Sdn Bhd for a minimum amount of RM300 million. Sapura Technology holds a 16% stake in the company.

Permodalan Nasional Bhd, effectively holding a 12% interest in Sapura Energy, also committed to subscribing its entitlement for an amount to be agreed upon a later date.

Following the completion of the rights issue expected in the fourth quarter of this year, Sapura Energy’s total number of shares will increase from 5.99 billion to 15.98 billion.