LONDON: Nostrum Oil & Gas Plc, an independent oil and gas company engaging in the production, development and exploration of oil and gas in the pre-Caspian Basin, announced that is has agreed, subject to certain conditions, to acquire 50% of Positive Invest LLP, which holds the subsoil use rights to the Stepnoy Leopard licences in North Western Kazakhstan, for US$500,000. [the_ad id=”31605″]Nostrum has the right to buy the remaining 50%, subject to the satisfaction of certain additional conditions, at a price of US$0.27 cent per boe of proven and probable reserves.
Management estimates that the Stepnoy Leopard licences could hold up to 452 mmboe of in place volumes of which up to 200 mmboe could be reported as Contingent Resources and over 20% estimated to be liquids.
There are eight fields within the licences with over 100 wells drilled in the Soviet era which have confirmed hydrocarbons to be present. The resources are considered by management to be contingent as the licences expire in 2020.
One of the conditions precedent required by Nostrum for its acquisition of the remaining 50% in Positive Invest is the extension of the licences by 25 years. In addition, Nostrum requires, as a condition precedent, the approval of a development programme which allows the raw gas from the fields to be treated in Nostrum’s gas processing facilities.
Kai-Uwe Kessel, Chief Executive Officer of Nostrum commented: “I am delighted that we have been able to take this first step towards acquiring the rights to develop the Stepnoy Leopard blocks. The licences contain the largest remaining undeveloped gas-condensate fields in North West Kazakhstan and have been extensively explored and appraised but never developed due to a lack of infrastructure. Nostrum will not only be able to leverage synergies with our treatment facilities but also the proximity to our Rostoshinskoye licence will allow us to consider the joint development of these licences which can further enhance the economics of the transaction.”
The proposed acquisition ensures Nostrum ties in further resources in the region surrounding its gas processing facility that can be processed at the Company’s gas treatment facilities. The proposed acquisition is structured in a two-step process.
In the event that the conditions for the second step are not met then Nostrum has the right to transfer back to the sellers the 50% interest in Positive Invest and the initial consideration of US$500,000 will be repaid to Nostrum.