KrisEnergy Ltd - Production ramp to mitigate weak crude prices


KrisEnergy's 3Q15 production growth of 20% YoY from first oil ramp up at its two Thai fields was offset by a low realised crude price. The full contribution from their peak production is expected to be achieved in 1Q2016.

The development drilling at Nong Yao field is closed to completion. Two more outstanding wells (out of total 16) are expected to be completed by end-November to achieve gross peak production of 10,000b/d (net 2,250b/d).

Wassana's drilling programme is two-third completed with five more development wells outstanding (out of total 15). The lifting of crude from Wassana commenced in August. The company guides gross peak production of 10,000b/d (net 8,900b/d) by end 2015.

Maintain TP of S$0.44/share. The company has demonstrated its project execution ability to bring on production growth in order to mitigate the impact of weak crude prices. We raise 2015 EPS from US¢4.8 to 6.8 on gains from equity transfer of Block 105 from Eni and Tanjung Aru from Neon Energy in 3Q15.

First production ramp-up. KrisEnergy had a 20% YoY production growth arising from first oil at its two Thai fields, Nong Yao and Wassana, was offset by a low realised crude price. The full contribution from peak production is expected to be achieved in 1Q2016.

Nong Yao development drilling is closed to completion. Two more outstanding wells (out of total 16) are expected to be completed by end-November to achieve gross peak production of 10,000b/d (net 2,250b/d). First oil started in Jun.

Wassana's drilling programme is two-third completed. With a programme of 15 development wells, the company has five remaining wells which they target to finish by end of the year. The lifting of first crude from Wassana commenced in August. The company guides gross peak production of 10,000b/d (net 8,900b/d) by end 2015.

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Maintain target price of S$0.44/share. The company has demonstrated its project execution ability to bring on production growth in order to mitigate the impact of weak crude prices. We raise 2015 EPS from US¢4.8 to 6.8 on gains from equity transfer of Block 105 from Eni and Tanjung Aru from Neon Energy in 3Q15. (Read Report)

Source : Credit Suisse Asia Pacific Equity Research

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