Kazmunaigaz Exploration Regulatory News (KMG)

29 May 2007 08:09

JSC KazMunaiGas Exploration Prod29 May 2007 JSC KazMunaiGas Exploration Production Received Option to Acquire a 50% Stake in Nations Energy Astana, 29 May 2007. JSC KazMunaiGas Exploration Production ("KMG EP" or the ("Company") announced today that it has received the option to purchase a 50%beneficial interest in CITIC Canada Petroleum Limited ("CCPL" - formerly NationsEnergy Company Ltd) from JSC National Company KazMunaiGas ("NC KMG"). CCPL's main asset is 94.62% 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. The option was granted for one year by China's CITIC Group ("CITIC") to NC KMGon 28 December 2006 in connection with the acquisition of CCPL by CITIC forUS$1.91 billion subject to adjustments as agreed on October 25, 2006. The option gives KMG EP the right to acquire a 50% stake in CCPL for an amountequal to the 50% of CITIC's acquisition price subject to certain adjustments.If the option is exercised, US$150 million of the acquisition price will beequity financed and entitled to receive certain priority return on investment,while the remaining balance will be debt financed without any recourse to thepurchaser. Commenting on the deal, Mr. Askar Balzhanov, Chief Executive Officer of KMG EP,said: "Kazakhstan remains our focus and the option on Karazhanbasmunai isanother example of our determination to expand our domestic asset base onattractive terms. We are working closely with CITIC and, subject to the resultsof detailed due diligence and our Board of Directors' permission, we expect toexercise the option and close the transaction this year." The decision to transfer the option to KMG EP has been approved by the Company'sand NC KMG's Boards of Directors. KMG EP has until 1 September 2007 to exercisethe option subject to extension by mutual agreement. - ENDS - Notes to Editors: KMG EP is the 3rd largest Kazakh oil and gas producing company with 203.2 mm t(1.5 bn bbl) of proved and probable reserves at the end of 2006 and over 9.5mmt(192 kbopd) of crude production in 2006. The recent acquisition of 50% ofKazgermunai made KMG EP the 2nd largest Kazakh oil and gas producer. TheCompany's shares are listed on Kazakhstan Stock Exchange and the GDRs are listedon London Stock Exchange. The Company raised approximately US$2 billion in itsIPO 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 94.62% 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 which, according to the company, has proved reserves of about 55mmt (364 million barrels ) as of the end of 2006. In 2006 JSC Karazhanbasmunaiproduced approximately 2.3 mmt (42 kbopd) of crude oil. For additional information please contact: KMG EP, Public Relations (+7 317 297 7908, +7 317 297 7924) Ms. Lyazzat Kokkozova E-mail: pr@kmgep.kz KMG EP, Investor Relations (+7 317 297 5433) Mr. Alexander Gladyshev E-mail: ir@kmgep.kz WMC Communications Ltd (+44 207 930 9030) Elena Dobson e-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