KrisEnergy Tumbles As Vietnam Exploration Disappoints

Published Jan 10, 2014 1:51 AM by The Maritime Executive

Shares in upstream energy exploration firm KrisEnergy Ltd tumbled on Friday after the firm said exploration on a well in Vietnam yielded disappointing results, while the Singapore index edged higher.

KrisEnergy shares slid as much as 29 percent to S$0.84, the lowest since the company made its debut on the Singapore Exchange in July, 2013. It was among the worst performers on the exchange.

The company said on Thursday that it had completed drilling and testing of the Cua Lo-1 well in Block 105, offshore Vietnam, and concluded that commercial development is unlikely, after another well in Vietnam yielded disappointing exploration results at the end of last year.

Bank of America Merrill Lynch analysts cut the target price on KrisEnergy by 13 percent to S$1.22.

"We believe KrisEnergy will regroup and reassess several other exploratory prospects that still can be drilled in both its large Vietnamese assets," the analysts said.

The analysts maintained their "neutral" rating on the stock, saying the new exploration strategy and subsequent drilling needs time, and that the news flow could be scarce in the next six months.

The benchmark Straits Times Index inched up 0.1 percent to 3,147.90 points by 0450 GMT, on course for a 0.5 percent gain in the first full trading week of 2014. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 percent.

In other stocks, offshore oilfield service provider Ezra Holdings Ltd, dropped nearly 3 percent after the firm reported a 22 percent revenue gain and a 6 percent decline in net profit.