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Ezra to divest FPSO assets with proposed sale

Ezra to divest FPSO assets with proposed sale
Ezra Holdings has entered into a non-binding letter of intent to sell its FPSO Lewek EMAS in order to streamline resources and divert away from ownership of FPSO assets.

The sale of the FPSO is done jointly with Ezra’s operating brand EMAS Offshore Production Service, wholly-owned by EMAS Offshore Limited.

“This transaction is fully in line with the group’s strategy to move away from ownership of FPSO assets and will allow us to streamline our resrouces,” said Lionel Lee, group ceo and managing director of Ezra.

“Furthermore, it will allow us to move towards capitalising on the capabilities and experience we have harnessed from FPSO conversions and to build a franchise based on providing higher value-added service,” Lee added.

The FPSO Lewek EMAS is currently on charter to Premier Oil Vietnam Offshore BV as operator of the Chim Sao field offshore southern Vietnam.

The sale of the FPSO is subject to a formal and binding agreement and obtaining the requisite approvals, and the transaction is expected to be completed by end-June this year.

Meanwhile, Singapore-listed Ezra has posted a first half ended 29 February 2016 net loss of $305.28m as against the profit of $54.55m in the same period of last year. The losses were blamed on impairment on assets, share of losses from an associated company, and loss on disposal of fixed assets.

“Our performance for the quarter under review has largely been impeded by the lower charter rates and decreased vessel utilisation sustained by our offshore support & production services division, and this trend is expected to follow on in the ensuing months,” Lee said.

“The second half of the year will nonetheless continue to be a challenging period for the group, as we witness reduced oil and gas spending across the globe and ongoing uncertainty in new contract awards.”