Keppel acquires stake in KrisEnergy

July 9, 2012

Keppel Corporation Limited (Keppel Corporation), through a wholly-owned subsidiary, has subscribed for new shares in KrisEnergy Ltd (KrisEnergy) for a total consideration of USD 115m.

The consideration amount was injected as new capital into KrisEnergy, and Keppel Corporation now holds 20% of KrisEnergy's enlarged share capital. Established in 2009, KrisEnergy is an independent upstream oil and gas company with a diverse portfolio in Southeast Asia.

The acquisition was funded internally and the price was derived from a willing buyer, willing seller basis. KrisEnergy was previously 100% held by parent company KrisEnergy Holdings Ltd, whose major shareholder is First Reserve, a leading global investment firm dedicated to the energy industry. Mr Choo Chiau Beng and Mr Loh Chin Hua, who are the CEO and CFO of Keppel Corporation respectively, will be appointed to the Board of KrisEnergy as non-executive directors.

Mr Choo Chiau Beng, CEO of Keppel Corporation said, "As an investor, we believe that KrisEnergy's portfolio has long-term growth potential and could offer sustainable returns over the long run."

Currently, KrisEnergy operates six out of the 14 licences they hold in Cambodia, Indonesia, Thailand and Vietnam, covering a gross acreage of more than 63,000 sq km. With certified proven reserves of 14.4 mmboe (million barrels of oil equivalent), as of 31 December 2011, its portfolio has three offshore producing assets: the Kambuna gas-condensate field in Indonesia and the B8/32 and B9A oil and gas blocks in the Gulf of Thailand. The other 11 contract areas comprise a combination of development projects and exploration prospects. In 2011, KrisEnergy's three producing fields averaged 4,800 boepd (barrels of oil equivalent per day).

Keith Cameron, KrisEnergy's Chief Executive Officer, commented: "Keppel Corporation's strategic positioning is a validation for KrisEnergy and will support our growth. Keppel is the world leader in offshore rig design, construction, as well as repair and has enormous technical resources as well as global reach."

Mr Cameron was a founder and CEO of Pearl Energy, which was formerly listed on SGX and sold to Abu Dhabi listed Aabar Petroleum in 2006 and then subsequently to Mubadala Development Company, a state-owned investment fund of the United Arab Emirates in 2008.

Mr Will Honeybourne, KrisEnergy Non-Executive Chairman and Managing Director for First Reserve said: "Mr Choo Chiau Beng and Mr Loh Chin Hua are welcome additions to our Board and their contributions will be very valuable. As the majority shareholder, First Reserve is extremely supportive of this relationship given Keppel's global reach, technologies, and experience. KrisEnergy is an excellent example of First Reserve's value creation strategy which includes supporting world class management teams."

The above acquisition is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation for the current financial year.


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