Sumatec sees higher profits from Borneo Energy Oil acquisition

by **Cals** Fri 18 Jul 2014, 01:07

Business & Markets 2014

Written by Supriya Surendran of theedgemalaysia.com

Thursday, 17 July 2014 14:34

KUALA LUMPUR : Upstream oil and gas firm Sumatec Resources Bhd said its proposed acquisition of Borneo Energy Oil and Gas Ltd, which owns 2 oil fields in Kazakhstan, is set to boost its profitability by US$1.62million (RM5.15 million) in final quarter of 2014.

“If the acquisition falls through, this would enhance our profitability for our financial year ended Dec 31, 2015 and for FY14 a portion of this would be reflected in the fourth quarter,” said Sumatec Chief Executive Officer Chris Dalton.

Dalton said the 2 fields, Karaturun Vostochnyi and Karaturun Morskoi, also known as the Buzachi fields, comprise 26 wells, of which 5 are currently in production with a capacity to produce between 400 and 600 barrels per day.

Oil from the 5 wells currently in production can fetch up to US$30 per barrel, he told a news conference today.

Using a simple calculation, this is set to give Sumatec an additional profit of US$1.62 million for Q4FY14, in addition to the profits that it will reap from its Rakushechnoye oil field and the contribution from its gas development agreement it signed with Markmore Energy(Labuan) Ltd Last year, he said

“We are currently undertaking a due diligence on the assets from Borneo Energy, and we target to complete the acquisition by the end of the year,” said Dalton.

Sumatec announced on July 11 that it has agreed to and has signed a framework agreement with Abu Talib Abdul Rahman and Dr Murat Safin to acquire a100% stake in Borneo Energy Oil and Gas for US$250 million (RM795 million) in cash and shares.