Roxi Gets Green Light to Sell Galaz Stake
Roxi has received approval from the Anti-Monopoly Agency of Kazakhstan to sell a 40% interest in Galaz and Company LLP, through its subsidiary Galaz Energy BV (GEBV), to LG International (LGI), announced on April 29, 2010. This was the final approval being sought from the government authorities for the deal, which will close with the payment by LGI to GEBV of US $15.6 million, as well as access to further funding of US $17.5 million loan financing from LGI for the further development of the NW Konys field. Out of these proceeds Roxi expects to receive a loan from GEBV, to be repaid out of Roxi's share of future production, of up to US $4 million. The final amount of the loan is the subject of further negotiations which are expected to be concluded in the next few days. Roxi retains a 34.22 percent. net interest through its holding in GEBV.
The Company anticipates the resumption of activity on the Galaz Contract Area with operations on NK22 and NW Konys Field in preparation for Pilot oil production in 2011.
Portfolio Rationalization and Re-structuring
Earlier this year the board implemented a rationalization of the Company's portfolio as a response to drilling results and the future demands on the business. The Company will concentrate its efforts on BNG and Galaz going forward. As part of this strategy the Company announced on October 12, 2010 the sale of its entire interest in Ravninnoe Oil LLP, and has also re-entered negotiations with Corporation BT LLP regarding the sale of Roxi's interest in Munaily. With respect to Beibars Munai LLP, Roxi will seek a farm-in partner in 2011.
Concentration of the Company's effort on its core assets will result in efficiencies, further reduce overheads and streamline the business as the operating subsidiaries are strengthened to implement operations and routine functions. This will also put the Company in a stronger position to develop the core assets going forward.
David Wilkes CEO commented, "We are very pleased to receive the Anti-Monopoly approval which will allow us to close the Galaz Sale, and look forward to a strong partnership with LGI appraising and developing the NW Konys field. Completion will provide funding for the ongoing costs of Roxi and will allow us to move into production on Galaz subject to the pilot license approval, which will considerably enhance the future profile of the Company."