Singapore-based energy exploration and production company Loyz Energy has agreed to buy a 20 per cent stake in three onshore concessions in Thailand for US$65 million (S$82.5 million).
These will be Loyz's first oil-producing concessions and are expected to immediately add to the group's cash flows, the group said on Monday.
Loyz will acquire the stake from Carnavon Thailand, a subsidiary of Australia-listed exploration and production company Carnavon Petroleum. The concessions are located in Thailand's Phetchabun Basin, about 300km north of Bangkok.
The concessions are producing at a rate of about 1,200 to 1,400 barrels of oil per day (bpd), Loyz said. It expects the production rate to rise to 3,000 bpd by June this year and 5,000 bpd by December, based on the field development plans in place by the operators, ECO Orient Energy (Thailand) and ECO Orient Resources (Thailand).
Loyz will pay US$33 million on completion of the transaction and will fund the remaining US$32 million from revenue generated by the producing wells at the concessions.
"This latest deal is our first foray into producing concessions and marks a turning point for the group," said Loyz managing director Adrian Lee.
"As soon as the agreement is completed, Loyz will enjoy immediate returns and positive cashflows from the producing wells at the three concessions, while seeing significant growth potential from exploration and improved production from existing operations."
Loyz shares dipped 2.5 cents to 34 cents as at 9.45am Singapore time, amid a fall in the broader Singapore market.