KMG EP acquires “Karpovskiy Severnyi” exploration block

abarrelfullabarrelfull wrote on 28 Dec 2011 22:16
Tags: kazakhstan kmg upstream

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Astana, 28 December 2011. KazMunaiGas Exploration Production JSC (“KMG EP” or “the Company”) announced the closing of the acquisition of 100% of shares in Karpovskiy Severnyi JSC from GazMunaiOnim LLP for 59 mln USD. Karpovskiy Severnyi JSC is a subsoil use right holder under the Contract for Exploration of Oil, Gas and Condensate at Karpovskiy Severnyi (“the Block”) contract area in the Western Kazakhstan region. The deal was approved on 18 October 2011 by the Board of Directors of KMG EP. All regulatory approvals have also been received.

The Block covers an area of 1,669.2 square kilometres and is located on the outer rim of the Pre-Caspian depression within a region which contains tectonic elements of the Karpovskiy uplift and the Pogodayevo-Ostafiev trough. A number of fields have been discovered in close proximity to the Block (e.g. Karachaganak, Chinarevskoe, Rozhkovskoe, Prigranichnoe, Vishnevskoe, Dolinnoe, Vostochno-Dolinnoe, and Zaikinsko-Rostashinskaya oil and gas condensate fields of the Orenburg oblast of the Russian Federation and the Teplovsko-Tokarevskaya group of oil and gas condensate fields) indicating certain petroleum potential within the area in the pre-salt section.

Total prospective recoverable resources of hydrocarbons (P50) estimated by KMG EP are 240 mln boe: gas – 98 mln boe (17 bln m3); oil and condensate – 142 mln boe.

To the south, the Block borders with the contract territory of Stepnoi Leopard LLP, the subsidiary of Mangistaumunaigaz JSC which holds the subsoil use rights for the Teplovsko-Tokarevskaya group of fields. The Block is also adjacent to the Federovskiy block, a 50% stake in which was recently acquired by KMG EP. There could be potential synergies with these KMG EP’s assets in the region given that there is realistic scope for common development and use of common infrastructure. These include common gas treatment facilities for current and future fields, as well as the regional infrastructure (Orenburg-Western Europe gas pipeline is located close to the western border of the Block and main export oil pipeline Atyrau-Samara goes through the Block) which may result in better project economics by optimization of capital expenditures.

Alik Aidarbayev, CEO, noted: “The acquisition of subsoil use rights on “Karpovskiy Severnyi” exploration block is in line with our strategy. Exploration activities on perspective blocks will result in growth of resources of KMG EP. We will continue acquisition of prospective exploration blocks to build a base for organic growth of the Company.”

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