CLIQ revises QA plans to become full operators

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KUALA LUMPUR: In a bid to become full operators of its proposed qualifying acquisition (QA) asset, CLIQ Energy Bhd has revised its plans to acquire only one of Canadian-listed Jura Energy Corp’s wholly-owned subsidiaries in Pakistan instead of two, according to a source familiar to the matter.

The unit that the special purpose acquisition company (SPAC) will now be acquiring from Jura is Frontier Holdings Ltd. Jura is an independent upstream oil and gas (O&G) company that is listed on the Toronto Stock Exchange (TSX). It operates nine concessions — three are producing assets, two are under development and four are under exploration — spread over various basins in Pakistan.

“CLIQ now only wants to acquire Frontier, which has two gas fields called Sara Suri and Kandra in Pakistan. The company is currently negotiating to get full operatorship of the assets, as required by the Securities Commission (SC),” said the source.

Previously, CLIQ intended to fork out more than US$80 million (RM257 million) to buy not only Frontier but also Jura’s Spud Energy Pty Ltd, which would have given it three producing onshore gas assets. Now, with just Frontier, the shell company will be looking at owning only two.

“Their (CLIQ’s) advisors were concerned that the previous acquisition structure would not be approved by the SC because CLIQ will not have a majority interest and full operatorship of the assets,” said the source. He added that Jura is currently discussing with its partners to buy the remaining interests it does not own in the two gas fields under Frontier.

Jura’s website shows the company has a 60% working interest in Sara Suri while the remaining 40% belongs to Oil & Gas Development Co Ltd, which is 74%-owned by the Pakistani government.

As for Kandra, Jura has a 37.5% working interest; Petroleum Exploration (Pty) Ltd  holds a 37.5% interest while Government Holdings (Pty) Ltd (GHPL) holds the remaining 25% interest. GHPL manages and monitors the government of Pakistan’s working interest in oil and gas exploration and production joint ventures.

“Only once it wholly owns the gas fields will it sell it to CLIQ so that the company can in turn be able to fully own and operate the asset,” the source said. He said that Jura has until today to give the nod and set the deal in motion with the new structure which will then entail a possible submission to SC on CLIQ’s QA by mid-January, the latest.

It is unclear what the current QA’s purchase price is. But interestingly, the previous proposed purchase price of US$80 million is below CLIQ’s initial public offering proceeds of RM364 million that was raised at its debut on April 10 last year with 75 sen a share. It is also less than 90% of the proceeds, which have been saved in a trust account for its intended QA while the remainder is used for operating expenditure.

For its financial year ended March 31, 2014 (FY14), CLIQ did not generate any revenue other than RM11.46 million from deposit placements. Operating expenses and finance costs incurred in FY14 were at RM12.79 million and RM12.43 million, respectively, resulting in a net loss of RM15.2 million that year from a net loss of RM3.91 million in FY13, when no revenue was recorded.

 

This article first appeared in The Edge Financial Daily, on October 7, 2014.