HONG KONG, Nov 4, 2019 - (ACN Newswire) - - Brightoil Petroleum (Holdings) Limited (hereinafter referred to as "Brightoil Petroleum" or the "Company", stock code: 933.HK), one of the largest private petroleum companies in the PRC, announced that the Company achieved breakthrough in debt restructuring. The moratorium in Singapore has been extended until January 2020, and the upstream Caofeidian oilfield of the Company is expected to complete the annual production target 40 days ahead of schedule and realized the increase of production, which effectively facilitated the debt restructuring and optimized the business layout of the Company. As such, resumption of trading can be expected soon.
Selling of 14 vessels to alleviate the debt burden
The Company successfully sold 4 vessels in June 2019. Since then, Brightoil Petroleum sold a total of 10 vessels in October 2019, and relevant proceeds from the sales are expected to be used to settle other debts of the Company after repayment of the vessel-related debts. In addition, the Company has been negotiating with different potential buyers in respect of the sale of all or part of the interests of the Company in Zhoushan Oil Storage and Terminal Facilities. All these actions effectively relieved the Company's financial pressure, which may facilitate the subsequent business restructuring of the Company.
Entering into settlement agreements with few key creditors and extending the wind-up petitions
In addition to improving the liquidity of Company by asset disposal, Brightoil Petroleum has been actively negotiating with the key creditors for settlement agreement. In August 2019, Brightoil Petroleum entered into a settlement agreement with Petco Trading Labuan Company Ltd. The Company has also made progress by entering into settlement agreements with other key creditors recently, and obtaining commitment letters from several creditors. It will continue to negotiate with its key creditors for the purpose of resolving the Petition by way of a consensus debt restructuring.
In addition to the potential debt restructuring, Brightoil Petroleum is exploring other capital raising initiatives with different investors. The subsidiary company has now been extended until 30 January 2020 with a view to giving effect to Brightoil Petroleum's ongoing debt restructuring efforts in Singapore. The continuing moratoria would provide Brightoil Petroleum with the necessary protection to ensure smooth execution of the debt restructuring.
Potential higher-than-expected production of upstream oil and gas fields may facilitate business transformation
In addition to continuous progress in debt restructuring, upstream business of Brightoil Petroleum also brings positives. From January to September 2019, the crude oil output of Caofeidian oilfield of the Company was 8.24 million barrels, 81.1% of the annual plan was completed, and it is expected to complete the annual production target 40 days ahead of schedule. The Overall Development Adjustment Plan ("ODAP") for the Caofeidian project was successfully put into operation on 29 September 2019. At present, the ODAP project alone contributes about 10,000 barrels of crude oil per day. At the same time, in terms of construction costs, the actual expenses incurred were approximately RMB2.4 billion, which saved approximately RMB500 million over the approved budget.
As one of the largest private petroleum companies in the PRC, Brightoil Petroleum is principally engaged in the exploration, development and production of upstream oil, tanker transportation and gas fields, oil storage and terminal facilities and international trading and bunkering business since its establishment in 1992. After the debt constructing, the Compnay will focus on upstream businesses including oil and gas resources exploration. Recently, the Company made a series of debt restructuring initiatives to continuously improve its debt position. With the Company's solid business foundation and competitive strengths in international market accumulated through years of operation, resumption of trading can be expected soon.
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