Tethys Petroleum Limited (Tethys or the Company), the oil and gas exploration and production company focused on Central Asia and the Caspian Region, announced Friday that it has entered into a definitive agreement for the sale of 50 percent of its Kazakh oil & gas assets to SinoHan Oil and Gas Investment B.V. (SinoHan), part of HanHong, a Beijing, PRC based private equity fund.
Dr. David Robson, chairman and president of Tethys, commented, "We are pleased with this transaction with SinoHan. As well as receiving a $75 million cash payment, we have agreed a bonus payment system that provides further cash payments based on the success on our 2013 and 2014 drilling program in adding reserves. Of course, we still own 50 percent and will also share the success of any further discoveries through this equity ownership as well. It makes sense to us at this stage of our corporate growth to bring in a partner to share 50 percent of the risk and funding in Kazakhstan, adding to a balanced portfolio company-wide where we have a joint venture with China National Petroleum Corp. and Total S.A. in Tajikistan, and also a partner on our projects in Georgia. We believe we have further demonstrated our ability to attract reliable, strategic partners to our projects in order to ensure we are fully funded to maximize the returns for shareholders."
Andrew Macintosh, group CEO of HanHong Private Equity, commented, "HanHong Private Equity is dedicated to investment in natural resources around the world. Central Asia, especially Kazakhstan, is one of our focus areas. This investment marks the first major oil & gas investment by HanHong in Kazakhstan and we are most excited to form a partnership with Tethys Petroleum for its strong track record and excellent expertise in Central Asia. We strongly believe that the financial resources and Chinese connections of HanHong, together with the sector know-how of Tethys, will accelerate the success of our joint venture."
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