KazMunaiGas Exploration Production JSC announced the conclusion of the Share Purchase Agreement with MOL Hungarian Oil and Gas Plc. on sale of 49% of shares in Karpovskiy Severniy JSC. Karpovskiy Severniy JSC is a subsoil use right holder under the Contract for Exploration of Oil, Gas and Condensate at Karpovskiy Severniy contract area in the Western Kazakhstan region.
As a result of this transaction KMG EP will form a joint venture with MOL to conduct further exploration activities on Karpovskiy Severniy exploration block. The deal was approved on 26 June 2012 by the Board of Directors of KMG EP. The 49% share in Karpovskiy Severniy JSC will be sold with premium to the initial purchase price and subject to price adjustment at closing. The transaction is subject to the consent of the Ministry of Oil and Gas in Kazakhstan, the waiver of state priority right and approval of the Kazakh and the EU antimonopoly bodies.
The Karpovskiy Severniy block is located approximately 40 km northwest of Uralsk, in the vicinity of Fedorovskiy block and existing discoveries, at the northern edge of the Caspian Depression. The license area is 1,670 sqkm. As a result of previous exploration activities, the area is extensively covered by seismic data and information gathered from numerous wells proves the presence of a working hydrocarbon system. Remaining, planned work programme includes the drilling of two deep pre-salt exploration wells along with minor seismic acquisition.
This transaction will allow KMG EP to share exploration risks and financial obligations with MOL. We also expect that KMG EP operational synergies may exist with the neighboring Fedorovskiy block, where KMG EP has 50% and MOL has 27.5% shareholdings and the consortium led by MOL achieved a significant gas-condensate discovery in 2008.
Alik Aidarbayev, CEO, noted: “The sale of 49% of subsoil use rights on “Karpovskiy Severniy” exploration block is in line with our strategy to form strategic partnerships with international oil companies which have good operating experience and good exploration records. Exploration activities on perspective blocks will result in growth of resources of KMG EP. We will continue with our exploration activities to build a base for organic growth of the Company.”