Sumatec Set To Expand Kazakh Oil And Gas Facilities
KUALA LUMPUR: Sumatec Resources Bhd is ready to embark on a three-year development plan to ramp up the production of its Rakushechnoye oil and gas field in Kazakhstan towards optimal production of about 2,000 barrels of crude oil per day.
“We are ready to start developing the facilities to optimally extract the hydrocarbon at the Rakushechnoye oil and gas field because oil price has somewhat stabilised and it’s feasible now for us to invest,” general manager (geoscience) Felix Chang told StarBiz recently.
Earlier this week, the company had proposed a fund-raising exercise to finance the development of oil and gas facilities in the area.
Sumatec currently extracts about 500 barrels of oil per day from the Rakushechnoye oil and gas field.
The oil and gas reserves in the area is estimated to be at 32.8 million barrels of oil (MMbo) and the gas reserve is estimated to be at 89.3 million barrels of oil equivalent (mmboe).
“We have to drill deeper to get to the river of oil and gas reserves. But first, we have to build a gas processing plant to cater for the production of gas that comes together with the oil.
“We expect to gradually start ramping up production in the middle of next year once all the facilities are in place,” he said.
Sumatec’s portion of the hydrocarbon will be based on production-sharing contract with its two partners.
Sumatec on February 17 had entered into a framework agreement with Ken Makmur Holdings Sdn Bhd and Markmur Energy (Labuan) Ltd (MELL), which is the concession holder of the Rakushechnoye oil and gas field, for the production of LPG and condensate from the 100 million standard cubic per day of the natural gas supplied from the area.
Chang said that based on a ballpark figure, the Rakushechnoye oil and gas field is able to generate revenue of US$377.6mil (RM1.68bil) per year.
On Monday, Sumatec proposed to undertake a private placement of up to one billion new shares to an independent third party to be identified, with estimated proceeds of RM80mil and issuance of up to 800 million shares as payment to contractors for development and production services to be provided at the Rakushechnoye oil and gas field.
It has also proposed renounceable rights issue of up to 3.22 billion of Sumatec shares with up to 3.22 billion detachable warrants at an indicative 10 sen per rights share on the basis of one rights share for every two Sumatec shares.
Under maximum scenario, the rights issue is expected to raise gross proceeds of RM322.6mil.