(Alliance News) - Caspian Sunrise PLC on Monday said it is in the preliminary stages of acquiring CS Energy LLP and its accompanying licence.
The Kazakhstan-focused oil and gas exploration and production company said it intends on acquiring 100% of CS Energy for a total consideration of USD15 million split into three tranches.
CS Energy is the proprietor of the West Shalva license covering a 25 square kilometre area in Kazakhstan's Zhetybay Steppe oil producing region in the west of the country.
Two instalments of USD5 million are to be paid, first on completion and then again following the first oil at West Shalva. In both instances 99.2 million shares will be issued at a price of 4.0 pence per share.
Once under Caspian ownership, a final USD5million will be paid in cash from West Shalva revenue.
The rationale behind the acquisition is that drilling would be "far less challenging" than alternative areas as wells could be drilled at shallower depths with less extreme temperatures and pressures.
The acquisition remains subject to approval by the Ministry of Energy of the Republic of Kazakhstan.
Caspian Sunrise shares were down 5.2% to 3.65 pence each in London on Monday afternoon.
By Elijah Dale, Alliance News reporter
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Caspian Sunrise (CASP)