RAMBA ENERGY: 8 Things You Should Know From Investor Session

Ramba management at investor dialogue yesterday @ Suntec Singapore Convention & Exhibition Centre. Photo: RHT Events and ProductionYesterday’s shareholder and investor dialogue session was a full house. For those who didn’t have a chance to interact with the company, here are 8 takeaways from the event.

1. First oil production from three wellheads in the Akatara Field in the Lemang PSC will start in a matter of weeks.

2. The KKR factor - A Farm-In Agreement from KKR-Backed Mandala Energy for USD102.6 million was completed in February 2016. This partnership reduces capital commitment for Ramba, pays back Ramba’s earlier investment in Lemang PSC and brings in world class technical expertise.

3. KKR Lends Capability, Creditability and Confidence - Ramba’s Lemang PSC is KKR-Mandala Energy’s first Indonesian oil and gas investment. KKR’s Mandala Energy is run by a team of ex-Pearl Energy’s senior management.

4. Low Operating and Capital Cost Structure - The Farm-In Agreement was completed in February 2016 when the global crude oil prices were at one of its lowest for years. Still the deal went ahead. Even at low oil prices, the production out of Lemang is still considered economic.

5. Zero gearing - Ramba has NO LONG TERM DEBT in its Indonesian asset. All the exploration and development cost over the past 7 years have been FUNDED BY EQUITY. Not bad for an O&G company these days.

6. Cheaper Services and Equipment, Healthy Margins - At current low oil prices, many of Ramba’s supply contracts for equipment and services have come in a third cheaper than it used to be. This means the impact of the low oil price can be offset by low operating and capital cost, helping to maintain a healthy margin.

7. Survival of the Fittest – Zero gearing + Low cost = survivability. Ramba’s conservative approach has ensured its survival over the past few years while dozens of Indonesian O&G companies and investment funds were not so lucky.

8. Committed Shareholder – Major shareholders, Mr David Aditya Soeryadjaya, Executive Director and CEO of the company will underwrite his share of the rights cum warrant issue. He will also be subscribing for a portion of the excess rights. He has been putting his own capital into the company and is confident of the future of Ramba.