Transmeridian Exploration to Acquire Bramex Management
Transmeridian Exploration says that it has agreed to purchase Bramex Management, Inc., which owns the 50% of JSC CaspiNeft TME not currently owned by Transmeridian. Transmeridian operates the South Alibek Field in Kazakhstan through its present interest in CaspiNeft under a joint operating agreement with Bramex. Upon the closing of the transaction, which is expected to occur on or about December 23, 2005, Transmeridian will own 100% of CaspiNeft. Closing of the transaction is subject to several conditions, including release of liens on the shares and assets of CaspiNeft, receipt of appropriate government approvals and other customary conditions.
The terms of the agreement require Transmeridian to pay a total of $168 million at the closing, of which approximately $42 million is to repay the outstanding bank indebtedness of CaspiNeft and the remainder represents the purchase price for the shares of Bramex. Transmeridian expects to fund the purchase price for the acquisition of the shares and the repayment of debt of CaspiNeft through a combination of new debt financing and the issuance of additional equity, either of which may involve capital markets transactions.
``With the field still in the early stages of development, we believe the timing is right to acquire the remaining equity interest in CaspiNeft,'' commented Lorrie T. Olivier, President and Chief Executive Officer. ``The additional ownership interest, together with results from the two wells drilled so far this year, the SA-3 and SA-14, and other reserve revisions, should increase our net proved reserves over year-end 2004 by approximately 150%. And with the price we receive for oil sales roughly doubling since last year, we expect to see the present value of those reserves increase by a multiple of four to five times. If we are successful in achieving our goal of financing at least half of the required capital in debt, we believe this transaction will result in a significant increase in value for our shareholders.''
Separately, Transmeridian announced that its Board of Directors had appointed Edward G. Brantley as Vice President and Chief Accounting Officer, effective as of September 26, 2005. Prior to joining Transmeridian, Mr. Brantley was employed for over five years by Pride International, Inc., an international oilfield services company, where he served in several capacities, including Treasurer and Vice President and Chief Accounting Officer.
The potential new debt financing and issuance of additional
equity referred to in this press release shall not constitute
an offer to sell or a solicitation of an offer to buy any
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