The information contained within
this announcement is deemed to constitute inside information as
stipulated under the retained EU law version of the Market Abuse
Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018. The
information is disclosed in accordance with the Company's
obligations under Article 17 of the UK MAR. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
Caspian Sunrise
PLC
("Caspian Sunrise" or the
"Company" and together with its subsidiaries, the
"Group")
Update on the disposal of the
BNG shallow MJF & South Yelemes structures
and
Operational
Update
Introduction
The board of Caspian Sunrise (the
"Board") is pleased to
announce that BNG Ltd LLP ("BNG"), the Group's 99% subsidiary,
which holds the BNG Contract Area licences, has entered into a
conditional Sale & Purchase Agreement with Absolute Resources
LLP ("SPA") to sell the
shallow BNG MJF and South Yelemes structures for a headline cash
consideration of US$88 million (the "Disposal").
Caspian Sunrise will retain
ownership of the BNG deep structures, Airshagyl and Yelemes
Deep.
Background
The MJF structure is the principal
shallow structure on the BNG Contract Area and has accounted for
the vast majority of the Group's oil production since it first
produced oil in 2016.
The South Yelemes structure was
awarded its own export licence in 2021 but to date has only
produced from wells drilled in the Soviet era, as improved by
horizontal drilling.
On 14 May 2024 the Board announced
the conditional disposal of the BNG shallow MJF and South Yelemes
structures for a headline cash consideration of approximately US$83
million. At that time the proposed purchaser Absolute Resources LLP
("Absolute Resources"), was
granted a 90 day exclusivity period to conclude its due
diligence.
On 18 July 2024 the Board announced
that the proposed purchase price had by negotiation increased to
approximately US$88 million and that the exclusivity period had
been extended until 31 August 2024.
On 3 September 2024 the Board
announced that BNG Ltd LLP had entered into a conditional and
binding term sheet with Absolute Resources in connection with which
initial payments totalling US$14 million have subsequently been
received.
At a general meeting of the
Company's shareholders on 26 September 2024, and as required under
the AIM Rules for Companies, shareholders approved the proposed
disposal of the MJF and South Yelemes structures on the terms set
out in the circular posted to shareholders on 4 September
2024.
SPA
The Disposal will be effected by way
of the sale to Absolute Resources of the entire issued share
capital of a newly incorporated entity wholly-owned by BNG and
established in the Astana International Finance Centre (the
"NewCo") to which the
relevant subsoil use contracts will be transferred.
The Group will continue to own the
remainder of the BNG Contract Area, including the licences for the
two key deep structures - Airshagyl and Yelemes Deep.
The aggregate cash consideration
payable by Absolute Resources shall be the Kazakhstan Tenge
equivalent of US$88 million (the "Consideration"), of which US$14 million
has already been received by BNG.
The balance of the Consideration,
net of the outstanding Kazakh Government assessed historical costs
relating to the MJF and South Yelemes structures at completion,
which are currently approximately US$16 million and for which the
liability to continue to pay will be assumed by Absolute Resources
following Completion (as defined below), is to be paid as
follows:
·
On completion of the Disposal ("Completion") the Kazakh Tenge
equivalent of approximately US$54 million
·
Following Completion, a further approximately US$4
million to be paid in four equal instalments over a 120 day
period.
The Group will contribute subsurface
use rights under the subsoil use contracts and assets related to
the production of hydrocarbons under those contracts to NewCo prior
to Completion. No other obligations or debts shall be transferred
to NewCo.
Completion will be conditional on,
inter alia, the following conditions (the "Conditions"):
·
Absolute Resources having obtained relevant
antimonopoly and governmental consents in Kazakhstan;
·
Absolute Resources having received debt-financing
to pay the outstanding Consideration; and
·
there being no material adverse change in the
business, operations, assets, financial or trading position,
profits or prospects of the Group related to the relevant shallow
subsoil use contracts prior to Completion.
Under the terms of the SPA all
Conditions must be satisfied by 31 December 2024. However, if any
of the Conditions have not been satisfied by this date, BNG Ltd LLP
and Absolute Resources have agreed to negotiate and agree in good
faith a new long-stop date.
Other corporate transactions
West Shalva
acquisition
On 5 November 2024 we announced that
the change of control consent, which was a condition for the
completion of the West Shalva acquisition, had been received and
that we are now working towards formal completion.
Block 8
acquisition
As previously announced, the licence
renewal for one of the three structures at the Block 8 Contract
Area has been received. The licence renewal at the second structure
remains with the Kazakh authorities and the Group has decided not
to pursue the licence renewal at the third structure.
Once the licence for the second
structure has been renewed completion of the acquisition of the
Block 8 Contract Area will be dependent on the receipt of change of
control consents from the Kazakh regulatory authorities and the
subsequent re-registration of the ownership of the shares in Block
8's UAE registered holding company.
Operational update
BNG
Well 815 has been drilled to its
planned total depth of 1,900 meters, with testing
expected
following a planned acid
treatment.
In light of the expected imminent
sale of the BNG shallow structures no further drilling at either
the MJF or South Yelemes structures is planned. Work at the deep
Aryshagyl and Yelemes Deep structures on the BNG Contract Area
remains paused pending receipt of the licence upgrades submitted in
Q3 2024.
Accordingly, rigs previously in use
at the BNG Contract Area are now planned to be used to develop the
West Shalva and Block 8 contract areas.
West Shalva
In Q1 2025 we expect to spud a
shallow well with a planned Total Depth of 2,600 meters, which
would fulfil the existing work programme commitments under the West
Shalva licence.
If successful, the well is expected
to commence production in Q2 2025.
Block 8
At the Sholkara, the structure for
which the licence has been renewed, work to resume production from
the two previously producing wells is expected to recommence
towards the end of Q4 2024.
On receipt of the licence for the
Akkuduk structure work will commence to test Well AKD-4, which has
been drilled to a depth of 3,450 meters.
Contacts:
|
Zeus
James Joyce
|
+44 (0) 203 829 5000
|
James
Bavister
Andrew de
Andrade
Qualified person
Mr. Assylbek Umbetov, a
member of the Association of Petroleum Engineers, has reviewed
and approved the technical disclosures in this
announcement.
The person responsible for arranging
the release of this announcement on behalf of the Company is Clive
Carver, Chairman of the Company.
This announcement has been posted
to:
www.caspiansunrise.com/investors