Separately, Transmeridian reporots that it has agreed to acquire the 10% carried working interest in the South Alibek Field held by Kornerstone Investment Group, Ltd. for $15.25 million cash and one million shares of Transmeridian common stock. This transaction is expected to be completed by December 31, 2005.
Transmeridian has received updated reserve and cash flow estimates for the South Alibek Field, and based on its ownership of 100% of CaspiNeft, the buy-out of the carried working interest held by Kornerstone and results from the wells drilled thus far in 2005, the Company's net interest in the estimated proved reserves located in the South Alibek Field has increased to 73.7 million barrels of oil. The before-tax present value of future cash flows from these reserves, discounted at 10%, as of October 1, 2005, is in excess of $1.0 billion. Transmeridian's reserve and cash flow estimates have been prepared by Ryder Scott Company, independent petroleum consultants.
``Successful completion of the acquisition of the Bramex and Kornerstone interests in the field, are significant milestones in the growth of Transmeridian,'' commented Lorrie T. Olivier, President and Chief Executive Officer. ``With substantial resources identified thus far, and the field still in the early stages of development, we believe the timing is right to consolidate our ownership. We are now moving forward with our plans to accelerate development of the field by bringing in additional drilling rigs, which should result in increased production, cash flow and value for our shareholders.''
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