Roxi Petroleum plc, the Central Asian oil and gas company with a focus on Kazakhstan, announced Tuesday the conditional sale of the Company's equity and debt interests in the Galaz Contract Area, the second of the Company's principal assets, for net proceeds of $20.72 million after estimates of associated taxes.
In the event that the price of Brent Crude reaches $60 per barrel by April 28, a further $2.9 million after taxes will become payable to Roxi.
The purchaser is a consortium led by Xinjiang Zhundong Petroleum Technology Co., (Xinjiang Zhundong) a Company listed on the Shenzhen Stock Exchange in China. The sale is conditional inter alia upon the receipt of appropriate Kazakh regulatory clearances, which are expected before the end of April.
Roxi plans to use the funds from the sale of the Galaz Contract Area (the Galaz Disposal) to fund all of the planned development in 2015 at the Company's flagship asset BNG.
The Galaz block is located in the Kyzylorda Oblast in central Kazakhstan. The Contract Area was extended on Jan. 10, 2011 to 69 square miles (179 square kilometers) and now includes significant exploration upside on the east side of the Karatau fault system, as well as the NW Konys development.
Roxi has an effective 34.22 percent interest in the licence for the Galaz Contract Area, which runs on an exploration basis until May 14, 2016. The other principal shareholders in Galaz are Sary-Arka Mining LLP, a Kazakh entity that is acquiring a stake previously held by LGI, the Korean Multinational (40 percent) and Baverstock GmbH (Baverstock) a company controlled by Kuat Oraziman the CEO of Roxi, (23.78 percent).
Since 2008, 17 wells have been drilled at Galaz, a significant number of which are or indicate they will be commercial. Production levels at the Contract Area vary as wells are brought into production from testing and then cease to be tested. Recently production at the Galaz Contract Area has been at the rate of approximately 770 barrels of oil per day or bopd (263 bopd net to Roxi).
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