Caspian Sunrise Regulatory News (CASP)

22 Aug 2007 09:27

Roxi Petroleum Plc22 August 2007 Roxi Petroleum Plc ("Roxi Petroleum" or the "Company") Acquisition of controlling interests over three new oil and gas assets inKazakhstan 22 August 2007 Highlights * Executed sale and purchase agreement to acquire controlling interests in three new oil and gas assets in Kazakhstan * Assets cover 1200 km2 in Western Kazakhstan in the PreCaspian and Turgai Basins * Assets provide access to high quality exploration acreage and early development of reserves * Total consideration of US$190m to be satisfied predominantly by issue of new shares at US$1.30 (65p) per share * The agreement includes an option to acquire associated assets for US$60 million Roxi Petroleum, created to acquire controlling interests in and develop oil andgas assets in Central Asia, initially focusing on Kazakhstan, announces that ithas entered into a sale and purchase agreement to acquire controlling interestsover three oil and gas assets in Western Kazakhstan. The transaction includesadditional options to further increase Roxi Petroleum's interest in the assets. The assets being acquired cover approximately 1200 km2 in Western Kazakhstan inthe PreCaspian and Turgai Basins. The assets give Roxi Petroleum access to largehigh quality exploration acreage and further opportunities for early developmentof reserves already on the State balance. The first asset is an exploration contract which covers an area of over 1100km2, not far from the Tengiz oilfield in the Pre-Caspian basin of WestKazakhstan. The contract for the block was signed earlier this year. The blockis considered by the Company to be highly prospective in both the Jurassicsandstone at depths of 2500-3000m and in the pre-salt Carboniferous sandstonesand carbonates at depths of 4000-5000m. Exploration in this area since the1980's has resulted in the development of several Jurassic discoveries in thesurrounding acreage. The second asset is an Exploration and Production Contract in the Turgai Basinnear the town of Kyzylorda in central Kazakhstan. The field contains "probable"reserves, in Cretaceous and Jurassic sandstones, on a wrench fault structuraltrap. There are four wells on the block with three delineating the oil-watercontact and one well drilled higher on the structure tested at rates of up to70m3/d (500bopd). Exploration upside exists deeper in untested Triassicsandstone targets. The third asset is the rehabilitation of an oilfield in the southern Pre-Caspianbasin. The field produced at low rates with high water cut from Cretaceous andJurassic sands at depths of 500-1200m. The field was re-licensed in 2004. Afull evaluation of remaining reserves needs to be undertaken. Explorationpotential exists deeper in the Permo-Triassic reservoirs. The Company will acquire a 59% controlling interest in Eragon Petroleum plc, aUK holding company which, through its subsidiaries, has controlling interests inthe three assets. More than 99% of the purchase consideration is to be satisfied by the issue ofapproximately 145 million new Roxi Petroleum shares at a fixed price of US$1.30(65p at an exchange rate of 2US$ per 1£) per share. The consideration shareswill represent approximately 46 per cent. of the Company's enlarged sharecapital. The acquisition will constitute a reverse takeover under the AIM rules and alsofall within the ambit of Rule 9 of the City Code. Accordingly, completion ofthe acquisition, and the resumption of trading in Roxi Petroleum shares areconditional upon, inter alia, the publication of an Admission Document on theenlarged company, obtaining a Rule 9 waiver from the Takeover Panel, andapproval by the Roxi Petroleum shareholders at a forthcoming extraordinarygeneral meeting. The acquisition follows the Company's strategy of acquiring further assets inCentral Asia. On completion of the acquisition, Roxi Petroleum's management will haveoperational and financial control of the three oil and gas fields. The Company will provide detailed information regarding the acquisition in there-admission document which will be published as soon as practical; however,given the work involved this is expected to take several months. The company remains committed to releasing its interim results for the periodending June 2006 on 7th September. Commenting on the potential acquisitions Rob Schoonbrood, Chief ExecutiveOfficer of Roxi Petroleum said: "These acquisitions mark a step change in the operational profile of Roxiproviding additional scope for early production whilst also further bolsteringthe upside potential of the Company. The acquisitions are part of our stated strategy of adding value by following adual track programme: operational development combined with strategicacquisitions. We shall continue to drive the Company forward, working with ourlocal partners to achieve our goal of making Roxi Petroleum a significant forcein the region and creating further value for our shareholders". Qualified person Duncan McDougall, Technical Director of Roxi Petroleum, has 25 yearsinternational experience of exploration, appraisal, and development of oilfieldsin a variety of environments. He began his career in the North Sea withCharterhouse Petroleum and BP Exploration as exploration and developmentgeologist. For the past 15 years, he has been advising, through his firmSaxford Limited, a large variety of companies on the purchase and development ofoil and gas assets in Africa, Europe, the Far East and Asia, with the largemajority in the Former Soviet Union region. He has compiled, read, and approvedthe technical disclosure in this regulatory announcement. Enquiries: Roxi Petroleum Plc Clive Carver Tel: +44 (0) 203 159 5315College Hill Paddy Blewer / Nick Elwes Tel: +44 (0) 207 457 2020W H Ireland Ltd James Joyce/David Porter Tel: +44 (0) 207 220 1666 This information is provided by RNS The company news service from the London Stock Exchange