2009 Won the concession to explore at West Belida Block, Jambi, South Sumatra, Indonesia
2009 Company sold to RH Petrogas Limited
Orchard Energy Pte Ltd was incorporated in 2008 as a 100% owned subsidiary of Ellington Investments Pte Ltd. Temasek owns 100% of Ellington.
Orchard was set up to go into the business of upstream oil and gas exploration, development and production. Orchard thus joined a bunch of state-owned oil exploration companies such as Japan Petroleum Exploration Co, Korea National Oil Corp, China National Offshore Oil Corp, India's Oil and Natural Gas Corp, Malaysia's Petronasl Thailand's PTT Exploration and Production and Indonesia's Pertamina.
It was the new kid on the block in an extremely tough and high risk industry. Orchard basically started from scratch and had to build head counts in various specialist expertise such as geologists, geophysicists, deep sea drilling engineers, consultants, drilling contractors, third-party specialists, etc. The company started off with S$13,000,000 seed capital and it is not known if it had taken on debt. The capitalisation is peanuts, a drip in the ocean, for an upstream oil project.
In 2009 Orchard won the Production Sharing Contract to drill for oil in Indonesia waters, in the area West Belida Block, Jambi, South Sumatra. This was to be undertaken in a JV between Orchard's subsidiary, Orchard Energy (West Belida) Ltd and P.T. BEL West Belida in which Orchard had 94% interest.
Before the ink on the Production Sharing Contract can dry, Temasek suddenly had a change of heart and sold off Orchard Energy. It never explained the reasons.
The Sales & Purchase Agreement was signed in Dec 2009 between Ellington and Petrogas, a company listed on Singapore Stock Exchange. Orchard had burnt almost its entire capital. Its net asset by then was about S$350,000. Petrogas paid cash consideration of about S$350,000 and assumed contract liabilities of US$5,700,000. Loss to Temasek was S$12,650,000. Could be more if there were intra-company indebtedness written-off. We don't know if there were any.
Petrogas is itself a small cap stock and newbie in oil E&P. in 2015 Petrogas surrendered the concession after a study determined there was no oil or gas in the block.
This was no financial investment. It was Temasek doning the Economic Development Board hat. It was Temasek's attempt to create a state-run oil company that will ensure sustainable natural gas supply for Singapore. The mission is of national interest, but what happened to the execution? Was it a bunch of finance guys ai'nt no good oil men?
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Temasek's investments in oil companies has'nt been rosy. Check out other companies I have covered : FTS International, Chesapeake, Cheniere, Kunlun Energy Venari Resources Seven energy
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