A Letter of Offer (“Offer Letter”) dated 21 September 2014 between Risco Energy and SGX-Listed Ramba Energy (RMBA SP), augmented by a subsequent December 2014 extension, secured an exclusivity period until 31 January 2015 to evaluate and acquire a 25% working interest in Lemang PSC.
The expiry of this exclusivity period on 31 January 2015 has occurred without any definitive agreement between both parties being executed and no further extension to the exclusivity period.
The falling oil price opened a valuation gap that the parties were unable to bridge.
Risco is highly value and return focused and continues to exhibit transaction valuation discipline.
As a company, Risco has participated in over US$500m of deals since 2010 and delivered exceptional value generation from its disciplined investment activities.
Expiry of exclusivity period to acquire a 25% interest in Lemang PSC
Risco Energy Investments Pte Ltd (“Risco”) previously reported back in September 2014 that it had signed an Offer Letter with Ramba Energy securing exclusivity to evaluate and acquire a 25% interest in the Lemang PSC, Sumatra, Indonesia. This exclusivity timeframe was extended in December 2014 until 31 January 2015 and the period has now lapsed without any definitive agreement.
Tom Soulsby, Risco’s CEO, commented on the expiry of transaction exclusivity saying:
“Risco is focused on value and returns and, in the current oil price environment, continues to apply transaction valuation discipline to meet shareholder return expectations. As a result, we were unable to reach a common ground on value with Ramba. Resources are now being focused on a rapidly increasing opportunity portfolio.”
Risco Energy and its oil & gas asset history
Risco is a Singapore incorporated company focused on upstream oil and gas in ASEAN. With a strong and clearly demonstrable track record of both operational enhancement and value generation, Risco’s team of professionals possess an outstanding mix of technical, financial and in-country expertise.
Risco’s history of oil and gas investment dates back to 2010, having managed and operated assets in Philippines, USA and Indonesia. The senior Risco management team has some 200 years collective experience of managing oil and gas assets across Asia, Australia and the USA.
Geographically, the company’s direct and indirect participation in oil and gas producing assets has spanned South Texas, Southeast Sumatra, Northwest Java, East Kalimantan, North Sumatra, Seram Island and onshore Central and South Sumatra, as well as offshore Palawan, Philippines.
Risco has invested in conventional oil and gas production as well as unconventional production in the form of CBM and shale/tight sands. Since 2010, it has executed over US$500m worth of deals.
Risco currently owns 55.16% of ASX-listed Lion Energy (LIO AU), which holds both conventional and shale oil and gas interests in Indonesia.
Risco’s strategy is to build a balanced portfolio of oil and gas producing, development and appraisal assets, with modest brownfield exploration exposure in ASEAN. A critical facet of our strategy in delivering strong value generation, both historically and currently, is strong partner alignment. This is a key feature of the proposed transaction with Ramba. Risco is committed to growing the portfolio organically and inorganically and hence will be actively looking to grow in Indonesia and the region, particularly where there are strategic, operating and capability synergies.
Risco Energy contact
Risco Energy Investments Pte Ltd
+62 21 2927 1735/+62 812 129 6380
About Risco Energy
For more information about Risco Energy, click here.This report is prepared for general information purposes only. Any third party seeking to rely upon this report should seek separate professional advice in relation to any of the facts or opinions set out herein. Risco Energy Investments Pte Ltd, its affiliates, its and their directors, officers and employees, and the consultants producing this report ("Risco") do not assume and hereby expressly disclaim any liability to any third party in respect of the contents of this report or any opinions or conclusions which might be drawn from it. Any third party using or otherwise relying upon the contents of this report does so entirely at its own risk, and any such reliance shall be construed as a waiver of any claim against any party comprising Risco in respect of the contents of this report.