Boss Energy goes shopping in Kazakhstan
You can purchase access to this special report or subscribe to Business News.
Subscribe to Business News.
Boss Energy Ltd has agreed to partner in the acquisition of the 107.6 square kilometre Tortay oil concession in Kazakhstan for a consideration of US$5 million ($5.38 million) cash and 20 million fully paid ordinary shares.
The Nedlands-based oil explorer has also entered into a conditional heads of agreement (subject to due diligence) with a Hong Kong listed company whereby the listed company will fund 100 per cent of the US$61million acquisition costs of the field to earn an interest of between 51 per cent and 75 per cent in the Tortay Concession.
In effect, Boss will have its minimum of 25 per cent acquisition cost financed and quarantined against the Tortay asset, with its portion of the acquisition costs only recoverable from revenue produced from the field.
The Tortay Concession is located approximately 360 km south-east of the city of Atyrau near rail and road transportation facilities, and has 24 drilled wells of which five are operational with a current production capacity of 1,400bbls/day.
There is infrastructure in place with production and storage facilities and pipeline access.
Boss said there were a number of both internal and independent reports relating to the size of the field in terms of oil in place and recoverable reserves, and it was currently reviewing all data in order to prepare a report to the Australian Securities Exchange on oil reserves.
The company said it had been informed that there was potential to increase the current production capacity.
Boss is in the process of conducting technical, financial and legal due diligence on the project with its proposed partner, and if satisfactory, expects to enter into formal documentation in late March 2008.
To partly fund its contribution to the transaction, Boss is proposing a rights issue to existing shareholders of one share for every four shares currently held at an offer price of 40 cents per share along with one free attaching listed option (20 cents, 30 Nov 2010) for every four shares subscribed for under the rights issue.