Caspian Energy (CVE:CKZ.H) now has 100 percent ownership of Aral Petroleum Capital LLP, after it purchased all remaining interests adding to its 40 percent stake in Aral Petroleum Capital LLP, the operating entity of the East Zhagabulak oil field and North Block Licenses in Kazakhstan, not already owned by the Company.
Caspian appointed Yelena Tselenko as Interim Chief Financial Officer, who assumed this role on May 15, 2015, to help the company complete the Aral acquisition, replacing Brian Korney, who is now Caspian’s interim Chief Executive Officer, corporate secretary and director.
Caspian Energy started to take over control of Aral Petroleum Capital, the operating entity of the East Zhagabulak oil field in Kazakhstan for an aggregate price of US$47.1 million.
In connection with the acquisition, through a share swap deal first announced on August 1, 2014, Caspian said it has received conditional approval from the TSX Venture Exchange.
The Transaction was completed pursuant to the amended share purchase agreement dated November 11, 2014 between the Company, its wholly-owned subsidiary Caspian Energy Canada Limited, Asia Sixth Energy Resources Limited ("Asia Sixth"), Groenzee B.V. ("Groenzee"), a wholly-owned subsidiary of Asia Sixth, and four other parties.
Under the deal, the company is to issue Caspian shares to the other holders of Aral shares in a share swap deal. Upon the closing of the share purchase agreement, Asia Sixth will have a 35.1% stake in Caspian, while Meridian Capital and Firebird will own, respectively, 26.0% and 8.2% of Caspian.
On closing of the deal, Sixth Energy, which is the majority shareholder of Asia Sixth, and Meridian will provide a secured loan facility of up to US$21.5mln to Aral.
"Today's closing marks the culmination of almost a year's work on a comprehensive restructuring transaction which has truly transformed the organization and management of Caspian", said Caspian Energy’s chairman, Michael Nobbs.
Caspian says it has not changed its goal of exploring, developing and producing oil and gas from the highly prospective North Block Licenses in Kazakhstan.
As previously announced, operations at Aral were temporarily suspended due to sharply lower crude oil prices. Prior to the shutdown, Aral was in a position to produce about 1,300 barrels per day from some of the East Zhagabulak oil field, generating positive cash flows from its operations from a fraction of Aral's license areas.
The company is striving to keep the lowest possible costs, suggesting that it will resume operations as soon as the Board determines that economic conditions will sustain profitable production.
Until then, “Caspian and Aral will focus their attention to future activity on the greater North Block, to be ready to invest further capital in our exploration and development activities," said the company in a statement.
The government of Kazakhstan approved the sale, which has also been accepted by the TSX Venture Exchange’s NEX board.
The conditions of the NEX's approval included, among other things, execution of the Loan Agreement and approvals by the Kazakhstan government of the transfer of the Aral interests to Caspian.