KazMunaiGas EP approves share buyback programme
Azerbaijan, Baku, Sept. 16 /Trend A.Badalova/
The Board of Directors of JSC KazMunaiGas Exploration Production (KMG EP) has approved a share buyback programme, the company reported.
Under the programme KMG EP has an option to purchase its common shares (KASE:RDGZ KZ) listed on the Kazakhstan Stock Exchange ("KASE") and GDRs (LSE:KMG LI) listed on the London Stock Exchange ("LSE") up to the aggregate amount of US$300 million.
The starting of the programme is expected in the near future. It will take up to the end of 2012 to execute.
The shares and GDRs will be acquired at the prevailing market price as at the time of the purchase.
The Board of Directors has decided to buy back a portion of KMG EP common shares and GDRs. This decision demonstrates the confidence of Management in the value and prospects of the Company.
Furthermore, this step is an effective use of free cash resources to the benefit of all shareholders, the report says.
Together with realization of the common share and GDR buyback programme KMG EP will continue the earlier approved preferred shares buyback programme, which is in place until the end of 2011, the reports says. It is expected that the National Company KazMunayGas will not be selling its KMG EP shares.
KMG EP was created in March 2004 through the merger of JSС Uzenmunaigas (UMG) and JSС Embamunaigas (EMG). The company operates 41 fields in Western Kazakhstan excluding acquisitions made from 2007 through 2010.
At the end of 2010, proved plus probable oil reserves of the core assets (UMG and EMG) were estimated to be 1,707 million barrels, with an estimated reserves life of 26 years at 2010 production levels.
Exports accounted for 79% of 2010 sales in volume terms