Kazmunaigaz Exploration Regulatory News (KMG)

3 Oct 2007 07:02

JSC KazMunaiGas Exploration Prod03 October 2007 JSC KazMunaiGas Exploration Production to Acquire a 50% Stake in Nations Energy Astana, 3 October 2007. JSC KazMunaiGas Exploration Production ("KMG EP" or the"Company") announced today that its Board of Directors has approved a series oftransactions to acquire a 50% beneficial interest in CITIC Canada Energy Limited("CCEL") 100 % owner of CITIC Canada Petroleum Limited ("CCPL" - formerlyNations Energy Company Ltd) from CITIC Group ("CITIC") for approximately US$930million including purchase consideration of US$875.5 million and US$54.5 millionof financing costs. The acquisition is subject to certain regulatory approvalsand is expected to be completed before the end of the year. The purchase of a 50% interest in CCEL by KMG EP is based on an option grantedby CITIC to JSC National Company KazMunaiGas ("NC KMG") in December 2006 andtransferred to KMG EP in May 2007. The purchase consideration of approximatelyUS$ 875.5 million represents 50% of the amount paid by CITIC to the previousowners of CCPL in December 2006. CCPL's main asset is 94.6% of the share capital and 100% of voting control ofJSC ''Karazhanbasmunai'' ("KBM"), a large oil and gas company developing theKarazhanbas field in the western part of Kazakhstan. Total proven reserves ofKBM as of January 1, 2007 amounted to approximately 363.8 million barrels of oilaccording to a Miller and Lents reserve report. Oil production from the field in2006 was 2.3 million tonnes (42.7 kbopd). Part of the total acquisition consideration in the amount of US$150 million willcome from KMG EP's own funds and will be entitled to receive a preferred returnof US$26.2 million p.a. from the project . CITIC will provide limited recoursefinancing to the purchaser to finance the remaining balance of the purchaseconsideration and other financing charges at a cost comparable to KMG EP's owncost of financing. Management structure of CCEL and CCPL as well as underlyingassets will include representatives of both shareholders. Important matters,including related party transactions, annual workplan, budget, significantfinancial commitments and significant supply contracts will require unanimousapproval. Commenting on the deal, Mr. Askar Balzhanov, Chief Executive Officer of KMG EP,said: "With the acquisition of Karazhanbasmunai we continue to implement ourgrowth strategy by adding another 10% to our current production level. The dealdemonstrates our ability to expand our domestic asset base on attractive terms.We are working closely with CITIC with the goal to improve performance ofKarazhanbas field". - ENDS - Notes to Editors: KMG EP is the 2nd largest Kazakh oil producing company with over 9.5 mmt (192kbopd) of crude production in 2006 and 203.2 mmt (1.5 billion bbl) of proved andprobable reserves at the end of 2006. The Company's shares are listed onKazakhstan Stock Exchange and the GDRs are listed on London Stock Exchange. TheCompany raised approximately US$2 billion in its IPO in September of 2006. National Company KazMunaiGas represents the state's interests in the Kazakh oiland gas industry and is involved, through its subsidiaries, in various aspectsof the oil and gas business from exploration and production to transportation,refining, marketing and services. NC KMG owns approximately 61% of the ordinaryshares of KMG EP. CITIC Canada Petroleum Limited (formerly Nations Energy Company Ltd) was formedin 1996 as a private Canadian company to pursue international oil and gas E&Pprojects around the world. In 1997, Nations Energy acquired 94.6% of the sharecapital representing 100% of voting control of JSC ''Karazhanbasmunai'' from theGovernment of Kazakhstan. JSC Karazhanbasmunai holds 100% of the mineral rightsuntil June 2020 to develop the Karazhanbas oil and gas field in the western partof Kazakhstan. For further details please contact us at: KMG EP, Public Relations (+7 717 2 977 908, +7 7172 977 924)Lyazzat KokkozovaE-mail: pr@kmgep.kz KMG EP, Investor Relations (+7 7172 975433)Alexander GladyshevE-mail: ir@kmgep.kz WMC Communications Ltd (+44 207 930 9030)Elena DobsonE-mail: Elena.dobson@wmccommunications.com Forward-looking statements This document includes statements that are, or may be deemed to be, ''forward-looking statements''. These forward-looking statements can be identifiedby the use of forward-looking terminology, including, but not limited to, theterms ''believes'', ''estimates'', ''anticipates'', ''expects'', ''intends'', ''may'', ''target'', ''will'', or ''should'' or, in each case, their negative orother variations or comparable terminology, or by discussions of strategy,plans, objectives, goals, future events or intentions. These forward-lookingstatements include all matters that are not historical facts. They include, butare not limited to, statements regarding the Company's intentions, beliefs andstatements of current expectations concerning, amongst other things, theCompany's results of operations, financial condition, liquidity, prospects,growth, potential acquisitions, strategies and as to the industries in which theCompany operates. By their nature, forward-looking statements involve risk anduncertainty because they relate to future events and circumstances that may ormay not occur. Forward-looking statements are not guarantees of futureperformance and the actual results of the Company's operations, financialcondition and liquidity and the development of the country and the industries inwhich the Company operates may differ materially from those described in, orsuggested by, the forward-looking statements contained in this document. TheCompany does not intend, and does not assume any obligation, to update or reviseany forward-looking statements or industry information set out in this document,whether as a result of new information, future events or otherwise. The Companydoes not make any representation, warranty or prediction that the resultsanticipated by such forward-looking statements will be achieved. This information is provided by RNS The company news service from the London Stock Exchange