JKX Acquires Koshekhablskoye Gas Field in Southern Russia
JKX Oil & Gas has to agreed the conditional acquisition of 100% of the southern Russian Koshekhablskoye gas field. The acquisition is subject to consent from JKX's shareholders and will be executed through wholly owned subsidiaries of JKX acquiring 100% of the Field's licensee Yuzhgazenergie for a cash consideration of US$50 million.
Miller and Lents, independent oil and gas consultants engaged by JKX, has estimated that remaining proved gas reserves in the Field are 114 billion cubic feet and proved plus probable gas reserves are 216 Bcf. This would represent an increase of approximately 85% in JKX's proved plus probable oil and gas reserves.
The Field was discovered in 1972 and produced a total 89 Bcf of gas before operations were suspended in January 2006. In June 2006, YGE was granted a new 20-year license to rehabilitate and further appraise and develop the Field. YGE expects to commence development operations on the Field before the end of 2007, with first gas planned for 2008. Peak production of 50 million cubic feet per day is planned for 2011.
JKX will fund the transaction from existing cash resources.
Dr Paul Davies, Chief Executive of JKX, said "This strategic acquisition represents a significant opportunity for JKX to increase its reserves and asset base and to capitalize on its proven experience of operating in the region. The purchase of the Koshekhablskoye Field will provide us with a timely entry into the dynamic Russian gas market".