Roxi Petroleum Plc Proposed Sale of the Galaz Contract Area (6223B)
January 08 2015 - 1:00AM
UK Regulatory
TIDMRXP
RNS Number : 6223B
Roxi Petroleum Plc
08 January 2015
Roxi Petroleum PLC
("Roxi" or the "Company")
Proposed Sale of the Galaz Contract Area
Roxi, the Central Asian oil and gas company with a focus on
Kazakhstan, is pleased to update the market with news of the Galaz
Contract Area in which it holds an interest of 34.22 per cent.
Roxi notes the announcement made by Xinjiang Zhundong Petroleum
Technology Co., ("Xinjiang Zhundong") a Company listed on the
Shenzhen Stock Exchange in China, in connection with the potential
acquisition of 100% of the Galaz Contract Area ("Galaz") for an
aggregate consideration of up to $100 million including the
assumption of debt and for which it has been granted an exclusivity
period to 31 January 2015.
Roxi is pleased to confirm that although there is no certainty
that a sale will be concluded on the terms disclosed, it has
entered into a non-binding heads of terms and is working with
Xinjiang Zhundong and the other shareholders in Galaz to complete
the sale of Galaz on the terms disclosed below and expects to make
a further announcement once all the relevant legally binding
agreements have been entered into.
Principal disclosed terms
Xinjiang Zhundong announced that it is leading a consortium
seeking to acquire 100% of the equity and associated debt of Galaz
by the acquisition of the Kazakh entity Galaz & Co LLP that
holds the licence for the Galaz Contract Area for an aggregate
consideration of no more than $100 million
The proposal is subject to due diligence and on the signing of
binding documentation and would be conditional on approval of both
Kazakh and Chinese regulatory authorities
Impact on Roxi
Of the $100 million disclosed approximately $50.4m relates to
the equity of Galaz & Co LLP, in which Roxi has a 34.22%
interest and approximately $49.6m relates to the assumption of
shareholder loans owed by Galaz & Co LLP, of which
approximately $11.3 million is owed to Roxi.
In aggregate the share of the $100 million disclosed
attributable to Roxi is expected to be some $28 million.
.
Under the terms of the 2008 acquisition of 59% of Eragon
Petroleum PLC ("Eragon") from Baverstock GmbH ("Baverstock"), Roxi
has an obligation to carry Baverstock for the first $100 million of
costs on the Eragon assets (BNG, Galaz & Munaily). This
obligation has almost been fulfilled. Therefore the proceeds
attributable to Baverstock, which would be an additional $12
million, would also be available for the development of the BNG
Contract Area.
Including the contribution from Baverstock the proposed proceeds
from the sale of Galaz on the terms announced by Xinjiang Zhundong
would fund at least four deep wells at BNG.
Galaz
Background
The Galaz block is located in the Kyzylorda Oblast in central
Kazakhstan. The Contract Area was extended on 10 January 2011 to
179 square kilometres and now includes significant exploration
upside on the east side of the Karatau fault system, as well as the
NW Konys development.
Pilot production commenced on 19 January 2012 following approval
of the NW Konys Pilot Production Plan from the Ministry of Oil and
Gas, with emissions and flaring permits received from the relevant
authorities.
Since 2008 17 wells have been drilled at Galaz, a significant
number of which are or indicate they will be commercial. Wells
NK-3, NK-5, NK-7, NK-8, and NK-9 are on extended test producing in
aggregate 1,000 bopd on average. Additionally, Wells NK-4, NK6,
NK-12 and NK-31 are being prepared to commence test production.
Roxi's interest
Roxi has an effective 34.22 per cent interest in Galaz, which
runs on an exploration basis until 14 May 2016. The other principal
shareholders in Galaz are LGI, the Korean Multinational (40%) and
Baverstock, (23.78%).
Comment:
Clive Carver, Chairman said
"For some time we have made it clear that while we are very
pleased with our investment at Galaz we view the opportunities at
our flagship BNG asset to be greater.
The proposed sale our interest in Galaz on the terms disclosed
would fund the bulk of what we have planned this year at BNG."
Enquiries:
Roxi Petroleum PLC Clive Carver, Chairman
+7 727 375 0202
WH Ireland Ltd James Joyce / James Bavister
+44 (0) 207 220 1666
This information is provided by RNS
The company news service from the London Stock Exchange
END
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