SINGAPORE - Loyz Energy said on Tuesday (May 2) that it will settle outstanding payment to Carnarvon Thailand for oil concessions in Thailand.
The payment relates to its subsidiary Loyz Oil Thailand's acquisition of a 20 per cent participating interest in three onshore oil concessions in Phetchabun Basin from Carnarvon in March 2014.
Loyz said its unit has entered into a supplemental sales and purchase agreement with Carnarvon to settle the outstanding payment of US$31.2 million (S$43.5 million).
The settlement will be by way of a payment of US$4 million, and a 12 per cent cash payment on the sales proceeds should Loyz sell the oil concessions it acquired in Phetchabun Basin in a single tranche to an unrelated third party for more than US$45 million.
Loyz said that US$4 million would be considered full and final settlement of the outstanding payment and no further payment is required from the firm, other than in the event of a sale where sales proceeds exceed US$45 million.
The firm said the agreed payment of US$4 million shall be made in a combination of internal resources and debt/equity where necessary. The US$4 million comprises a non-refundable cash deposit of US$50,000, and US$3.95 million to be paid by June 30, 2017, in cash or a combination of cash and new shares.
Mr Jeffrey Pang, chief executive and executive director at Loyz Energy, said: "This settlement is expected to give the group a significant gain of approximately US$19.3 million in the current financial year ending 30 June 2017. This, together with the full settlement of our shareholders' loan earlier in the year with equity, will significantly improve our balance sheet.
"With this turnaround, we are now ready to pursue new strategic and accretive opportunities. We will steer towards delivering sustainable and stable earnings in the long term, as well as to enhance value for shareholders," Mr Pang added.
Loyz had bought the stake in the oil concessions for US$65 million, of which US$33 million was paid in full when the acquisition was completed on April 30, 2014. A further US$702,000 was paid by way of cash and shares last year.