ASTANA, Kazakhstan, April 10. Kazakhstan's Caspian Sunrise PLC, an oil and gas exploration and production company, intends to buy CS Energy LLP, which holds a license to develop the Western Shalva field in the Mangystau region, Trend reports.
According to the company, the maximum amount of the deal, which is planned to be concluded at the general meeting of shareholders on April 26, will be $15 million.
Caspian Sunrise PLC plans to pay the deal amount in three tranches: the first tranche - $5 million will be paid on completion of the transaction by issuing 99.2 million ordinary shares at a price of 4.0 pence per share; the second - $5 million, will be paid upon first oil production from the West Shalva field by issuing an additional 99.2 million ordinary shares at a price of 4.0 pence; and the final tranche will be the first $5 million in revenue from West Shalva.
The West Shalva contract area is rectangular in shape and extends over approximately 25 square kilometers. It is located in the oil-producing Zhetybay Steppe Area in the Mangystau region.
According to the company, West Shalva is adjacent to the more established Shalva, which has C1 reserves of approximately 5 mmbls and is believed to be producing at approximately 400 bopd. The company's management believes that drilling in Western Shalva will be less difficult since wells in Western Shalva will be drilled to a shallower depth and without extreme temperatures and pressures.
In addition, West Shalva is located closer to treatment and distribution hubs than the company's other assets. The Independent Directors therefore believe acquiring West Shalva would add a lower-risk asset to the group's portfolio.
Caspian Sunrise PLC notes that the acquisition of CS Energy LLP is also subject to approval by the Ministry of Energy of Kazakhstan.