First Reserve subscribes to $126m KrisEnergy rights issue

KrisEnergy will issue 440.1 million new shares on the basis of 42 rights shares for every 100 existing shares. They will be priced at S$0.385 apiece, a 13.5% discount to the June 12 closing price.

First Reserve will subscribe to 87.3 million shares - 43.9% of its entitlement - for a total consideration of S$33.6 million. Singapore conglomerate Keppel, which First Reserve brought in as an investor ahead of KrisEnergy's IPO in 2013, will subscribe to its full entitlement of 137.9 million shares. The remaining rights shares have been underwritten by Merrill Lynch.

"The Rights Issue will enable us to continue our strategy of near-term growth in reserves, resources and production, and will increase our borrowing capacity for future projects such as in the G6/48 licence in the Gulf of Thailand, where we made a series of oil discoveries in the Rossukon area earlier this year for which we intend to submit a development plan shortly," Keith Cameron, CEO of KrisEnergy, said in a statement.

Since 2009, the company has built a portfolio of 19 contract areas in Bangladesh, Cambodia, Indonesia, Thailand and Vietnam, spanning the entire exploration-to-production life cycle. It is the direct operator in 13 of these contract areas. KrisEnergy has two projects in the Gulf of Thailand expected to commence production in the second half of 2015 and it wants to drill two development wells in Bangladesh.

The team behind KrisEnergy set up as an independent oil and gas E&P player in 1999, incorporated as Pearl Energy in 2003 and won backing from 3i. Shortly after listing in Singapore in 2005, the company was acquired by an entity controlled by the Abu Dhabi government. The team did not accompany the platform and founded KrisEnergy. First Reserve provided the start-up capital.

The PE firm committed $500 million and ended up deploying $300 million, taking a 98% stake. Keppel Corporation acquired a 20% interest in KrisEnergy for $115 million in 2012 and was a cornerstone investor in the company's S$270.8 million IPO. Just before the offering, Keppel exercised an option on First Reserve-owned shares to increase its holding to 36%. As of March, Keppel owned 31.2% and First Reserve had 45.2%.

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