Tethys Petroleum selling 50 percent of Kazakh assets to Chinese equity fund 07 ноября 2013, 14:24
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Tethys Petrolium is selling 50 percent of its Kazakhstan assets to SinoHan Oil and Gas Investment, a subsidiary of HanHong, a Beijing-based private equity fund, Tengrinews reports citing HalykFinance.
According to Senior Analyst Mariam Zhumadil, Tethys Petrolium announced the sale of 50 percent of their Kazakhstan assets to Chinese SinoHan Oil and Gast Investment on November 1. Tethys Petroleum will get 75 million dollars, $20 million of which it will channel into a Kazakhstan assets program.
“Additional performance bonus payments will be made to Tethys for the incremental discovery of 2P reserves achieved from the 2013 and 2014 drilling program, and also in profit sharing of excess profit at any exit by SinoHan from the project,” the company's press-release says.
According to Ms. Zhumadil, Tethys Petroleum will continue operating the Kazakh assets. Both Tethys and SinoHan will have the same number of board representatives. The press release states that according to Article 36 “the sale is subject to Kazakhstan state approvals, including the waiver on pre-emption”. Since the Kazakhstan government has the first refusal right in all oil project sales in Kazakhstan, to finalize the deal the companies now have to obtain the Government's waiver.
Hanhong Private Equity Management Company Limited owns assets in Chine, Mongolia, USA, Kazakhstan and South Africa. In Kazakhstan Hanhong owns shares in several gold mining companies that are at exploration and development stages.
Ms. Zhumadil refers to the news with mixed feelings, as “the sales of 50 percent shares in the most developed assets of the company in Central Asian region were unexpected”. “The financial resources of the new investor and his strong presence at the Chinese market may benefit the company in the short to medium term by allowing it to expedite the development of Kazakhstan assets and to remove the existing transportation bottleneck through construction of a pipeline that requires a lot of investment. We have Tethys Petroleum under research coverage with a 12-month target price of 57GBp and a Buy recommendation,” says the Senior Analyst.
The Group CEO of HanHong Private Equity Andrew Macintosh noted in the press release: “HanHong Private Equity is dedicated to investment in natural resources around the world. Central Asia, especially Kazakhstan, is one of our focus areas. This investment marks the first major oil & gas investment by HanHong in Kazakhstan and we are most excited to form a partnership with Tethys Petroleum for its strong track record and excellent expertise in Central Asia."
Tethys Petroleum Limited is an oil exploration and production company with projects in Kazakhstan, Tajikistan and Uzbekistan. Tethys Petroleum is an independent public company listed on Toronto Stock Exchange ("TSX") and on the Kazakhstan Stock Exchange ("KASE") in Almaty.