Australia-listed Skyland Petroleum Ltd. announced Tuesday that it has signed a binding share purchase agreement (SPA) with a private Russian company for the acquisition of a 100 percent stake in a subsidiary holding the Sakha License, a producing oil and gas asset located in Sakha (Yakutia) Republic in Eastern Siberia.
The Sakha License, covering an area of 947 square miles (2,452 square kilometers), contains 4 discovered oil and gas fields (one of which is on pilot production with oil sales within the region), several exploration discoveries and additional exploration targets.
The firm believed that the acquisition will transform Skyland into a significant player in one of the most important hydrocarbon basins which will be a major source of oil and gas for East Asia, China and India in the future. While the field's current output is limited to production for the local market, Sky Petroleum plans to raise production after the acquisition, and the firm is expected to commence much higher production for exports from 2018.
The planned acquisition is part of Skyland’s strategic objective of becoming a world-class player in the production of oil and gas in East Siberia and to open channels for the supply of commercially viable hydrocarbons to emerging Asian markets.
"We are extremely pleased to have made such progress in East Siberia thus far and we look forward to completing this transaction subject to conducting further due diligence." Dr David Robson, chairman and managing director, commented in the press statement.
"This agreement fits in very well with our long term growth strategy. Skyland has actively reviewed several projects in this region and believes that this project is extremely attractive and provides a very good base for Skyland’s entry into this prolific oil and gas province with export routes to the major east Asian economies. The Company certainly believes that this potential acquisition has the ability and the potential to substantially increase the value of the Company’s business both in the short and long-term future."
Completion of the transaction, which is subject to approvals, is expected before the end of 2016.
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