Atlantic Caspian acquires interest in TOO BN Munai for 750 mm boe field

Apr 17, 1998 02:00 AM

Atlantic Caspian Resources (ALCRY) has signed an agreement to acquire an interest in TOO BN Munai, a limited liability company registered in Kazakhstan.
TOO BN Munai is a joint venture company, which is acquiring prospective oil and gas reserves in the Caspian area of Kazakhstan. It is jointly owned by the East Caspian Oil, Inc. and TOO BN Consulting. TOO BN Munai has recently applied for oil and gas licenses on fields in the western region of Kazakhstan.
Under the terms of the agreement, ALCRY has acquired a 5 % interest in TOO BN Munai and will have an option to acquire an additional 65 % interest in the company. Exercise of the option is subject to the unconditional grant of the licenses as well as the company receiving a satisfactory report from oil industry specialists confirming that the extractable reserves are no less than 750 mm barrels of oil or oil equivalents.
It is also subject to the passing of resolutions by the company's shareholders approving the acquisition, increasing the company's share capital and granting authority for the issue of further shares.
For the initial 5 % interest, ALCRY has paid 6,250,000 British Pounds which was satisfied by the issuance of 15,625,000 ordinary shares of Atlantic Caspian Resources valued at 40 pence per ordinary share, or 1,562,500 ADR equivalents, valued at $ 6.70 per ADR. The shares are expected to be admitted to trading on AIM effective from April 17, 1998.
The option to acquire up to an additional 65 % of BN Munai is exercisable at any time through June 30, 1999. If ALCRY acquires additional interest through the exercise of the option, the purchase price will be approximately $ 0.27 per barrel of extractable reserves, subject to a maximum of $ 140 mm.
The purchase price will be satisfied by the issuance of ordinary shares, credited as fully paid at 40 pence per ordinary share, or $ 6.70 per ADR.
Commenting on the agreement, Peter Catto, chairman of Atlantic Caspian commented, "This investment into BN Munai is potentially very exciting. Together with our existing projects in Kazakhstan, Atlantic Capital could eventually be operating fields in excess of 1 billion barrels of oil or oil equivalents."

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