News 2011
#2 (68), April 2011KMG EP
KazMunayGas Exploration & Production (КМG EP) informed about an agreement concluded with Exploration Venture Limited (EVL) on acquisition of a 50 % interest in Ural Group Limited (UGL). UGL owns a 100 % interest in Urals Oil & Gas LLP (UOG), possessing the subsoil use right to conduct exploration of hydrocarbons on the Fedorovsky block located in Western Kazakhstan region near the city of Uralsk. The cost of acquisition of a 50 % interest in UGL is estimated at $149.1 million that includes $61.3 million for shares and $87.8 million for the chose in action under joint-stock loans (as of January 01, 2010).
According to the deal conditions, joint-stock loans will be paid in favour of KMG EP after the start of commercial production. The final price of compensation for joint-stock loans is subject to correction in connection with financing by EVL of the working program before the date of deal's completion. The deal will be financed from KMG EP's own means. UОG conducts exploration on the Fedorovsky block under the subsoil use contract valid till May 2014, with the further right to conclude a contract for production of hydrocarbon raw materials. In 2008 the oil and gas condensate field Rozhkovskoye was discovered in the territory of the Fedorovsky block which is assessed currently by UOG. According to the assessment of reserves by the end of 2010, approved by the State commission of the RK on reserves, the total recoverable reserves of gas and condensate by category С1+С2 on the Fedorovsky block are estimated at 203.4 million barrels of oil equivalent.
The main gas pipeline of Gazprom, Orenburg-Western Europe, passes via the territory of the Fedorovsky block. Besides, the export main oil pipeline Atyrau-Samara and the Karachaganak-Atyrau pipeline pass near the Fedorovsky block giving a possibility for the exit to the world market through the system of the Caspian Pipeline Consortium. Acquisition was approved by the decisions of the board of directors of KMG EP and the board of directors of EVL and is subject to approval by the state regulating bodies. Part of approvals have been already received. Completion of the deal is expected after obtaining of remained approvals, informs KMG EP's press-service.