BPTTs Teak Samaan and Poui (TSP) fields should provide
an adequate return on the investment by Neal & Massy Energy
and Perenco, its European oil partner, if it is able to extend
the life of the field, said stockbroker Peter Clarke.
He said it was an excellent opportunity for Neal & Massy
to get into energy in a big way and they chose a recognised
and experienced partner.
BpTT announced last week that its TSP fields have been sold
conditionally to Neal & Massy Energy and Perenco for the
sum of US$229 million ($1.4 billion).
N&M Energy will have a 17-20 per cent equity split with
Perenco, if bpTTs 30 per cent shareholder, Repsol, waives
its right to purchase the shares and the Government does not
exercise its option to purchase up to 15 per cent of the TSP
Clarke said N&M Energy may have to borrow against what
the fields will produce or come up with internally generated
funds to meet its commitment of US$46 million ($288 million).
nature of the oil fields is that it will produce substantially
in the first and second year and the returns will support
borrowings, he said.
However, he noted that the fields are on a decline.
example, someone may quote a field as having 200 million barrels
but because they dont have the technology at the time
only about 100 million will be recoverable, he explained.
The TSP fields currently produce about 20,500 barrels a day
with a natural decline of 30 per cent, and reserves of about
40 million barrels.
BpTT expects to complete the transactions in September, subject
to Repsols pre-emption, regulatory and other approvals.