Petrogrand: Signs Letter of Intent to Purchase 49% to Ripiano Holding
On Tuesday the 10th of February, Petrogrand AB signed a Letter of Intent regarding the acquisition of 49 percent of the shares and votes in Ripiano Holding Ltd, a Cyprus holding company with an oil producing subsidiary in Russia. The purchase price amounts to about 180 MSEK and is paid in cash.
The final Sale and Purchase Agreement (SPA) and the shareholders’ agreement will be signed shortly and consequently announced in a separate press release upon completion. Both agreements are subject to approval by the Board of Directors of Petrogrand.
The Russian Company operates in the European part of the Russian Federation (west of the Ural Mountains) and currently has oil production of exceeding 1 500 barrels per day (>200 tonnes).
A reserves estimation, undertaken in June 2014 according to Western SPE (Society of Petroleum Engineers) criteria states that total Proved reserves “1P” amounts to 15.40 million barrels (2.11 million tonnes). Proved and Probable reserves “2P” amount to 18.25 million barrels (2.50 million tonnes).
As of 1st January 2014 the state register of the Company’s estimated reserves according to the Russian Classification C1 amounted to about 25.78 million barrels (3.53 million tonnes), and “C1 + C2” reserves are registered at 39.21 million barrels (5.37 million tonnes).
A significant part of the funds paid for the shares will be directly invested to increase current production. Petrogrand representatives will be elected to the Company’s Board of Directors to ensure further field development.
The acquisition was negotiated in 2014 but Petrogrand chose to postpone the signing of the agreement awaiting the results of the Extraordinary General Meeting held on January 26, 2015.
