Kina Petroleum Limited

KPL, which owns a 16.75 percent stake in PRL 21, says in its Quarter 1 Report for 2018 that the joint venture continues its evaluation of the Western Province Floating LNG (FLNG) development scenarios and early cash flow from PRL 21 remains a priority.

The company believes that the licence’s significant resource potential, notably liquids, for which Kina will undertake a resource certification exercise, can be brought on stream in the near term.

This is to take advantage of oil prices which are presently forecast to hold well above the lows of 2016 and early 2017.

In its 2017 Annual Report, Kina said the strategy has been employed due to a decline in oil price coupled with uncertainty over the timing of extension of licenses, which are foundations of their acreage portfolio.

The report states that over the last 3 years, Kina has cut its costs by reducing manpower, freezing salaries and restructured its exploration obligations. More importantly, Kina says it has focused on its discovered assets, addressed their resource size, their cost of development and their viability of development in a US$50/bbl oil price environment.

The Kina board said in a statement the strategic and sophisticated investors include Phil Mulacek who, together with his affiliated company PIE Holdings LP, will maintain the percentage holding established in November 2014.

Funds raised from this placement will be applied to Kina’s ongoing working capital requirements, particularly in relation to its two key retention licences Petroleum Retention Lease (PRL) 21 (Elevala-1 and Ketu-1) and 38 (Pandora offshore discovery), where pre-development work is ongoing.