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HONG KONG, Nov 19, 2010 - (ACN Newswire) - Strong Petrochemical Holdings Limited ("Strong Petrochemical" or the "Company"; Stock Code: 0852.HK), an oil products trading company, is pleased to announce its wholly-owned subsidiary entered into a subscription agreement ("the Subscription") with The Sixth Energy Limited ("Sixth Energy") and Asia Sixth Energy Resources Limited ("Asia Sixth", wholly-owned by Sixth Energy) that Strong Petrochemical conditionally agreed to subscribe for 67 new shares of Asia Sixth, which represent 40% of the enlarged issue share capital of Asia Sixth following the Subscription. The Subscription marks Strong Petrochemical becoming an oil producer by owing 24% effective interests in an exploration and production of crude oil company of Kazakhstan.
An interest-free shareholders loan to Asia Sixth will be assumed by the Company and Sixth Energy in proportion their respective shareholdings in Asia Sixth. US$11,240,000 (or equivalent to HK$87,672,000) will be contributed by Strong Petrochemical and be repayable in 5 years. Together with the cash consideration of the Subscription of US$67 (or equivalent to HK$523), the total value of the transaction by Strong Petrochemical will be amounted to US$11,240,067 (or equivalent to HK$87,672,523).
Asia Sixth currently owns 10% direct and 50% indirect equity interests in Aral Petroleum Capital LLP of Kazakhstan, which has (1) a subsurface use right for exploration of crude oil in the Northern Block in Aktobe Oblast of Kazakhstan pursuant to the Exploration Contract; and (2) a subsurface use right for production of crude oil in the East Zhagabulak field in Aktobe Oblast for a term of 25 years commencing from 28 July 2010 pursuant to the Production Contract.
Mr Wang Jian Sheng, Chairman of Strong Petrochemical commented on the acquisition and said, "We are excited to acquire this prolific oil asset in Kazakhstan. It marks the entry of Strong Petrochemical into the Kazakhstan upstream exploration and production business, and soon become an oil producer. Leveraging on our Group's existing oil trading and downstream businesses, this move will create business synergies, which in turn, broaden the revenue base of Strong Petrochemical, as well as strengthen our competitive edges as an integrated supply chain in oil and gas sector."
As at today, Aral Petroleum Capital LLP was granted an exploration licence and production license in North Block in Aktobe Oblast with Ministry of Energy and Mineral Resources of the Republic of Kazakhstan. The exploration licence covers an area of 3,449 km2 with a series of exploration structures, the low, best and high estimate prospective recoverable resources are approximately 72.78MMbbl, 217.70MMbbl and 708.21MMbbl respectively. Meanwhile, the production licence covers a producing oil field, East Zhagabulak (EZ field), with 2 producing wells (EZ213 and EZ301). The estimated proved plus probable reserves (2P) for EZ field are approximately 6.23MMbbl. Given their plans on maintenance and additional pumps installation, the target aggregate daily production capacity of EZ213 and EZ301 will reach to 1,000 barrels.
Mr Wang concluded, "Strong Petrochemical plans to broaden the businesses worldwide. We are optimistic about the oil industry in Kazakhstan. The great potential of Kazakhstan assets not only enables us to expand the asset portfolio of our upstream business, but also enhances our future profitability for generating fruitful investment returns to our shareholders."
Kazakhstan's proven oil reserves were estimated at 30 billion barrels by the Oil and Gas Journal in January 2010. The country's main oil reserves are located in the western part of the country, where the 5 largest onshore oil fields, Tengiz, Karachaganak, Aktobe, Mangistau, and Uzen, are located. These onshore fields account for about half of current proven reserves, while the offshore Kashagan and Kurmangazy oil fields, in Kazakhstan's sector of the Caspian Sea, are estimated to contain at least 14 billion barrels.
HKEx: www.hkexnews.hk/listedco/listconews/sehk/20101118/LTN20101118547.pdf
Contact:
Quam IR
Ms Anita Wan
Tel: +852-2217-2687
E-mail: anita.wan@quamgroup.com
Ms Sharon Au
Tel: +852-2217-2680
E-mail: sharon.au@quamgroup.com
Ms Venus Lam
Tel: +852-2217-2909
E-mail: venus.lam@quamgroup.com
Topic: Investment
Source: Strong Petrochemical
Sectors: Gas & Oil
https://www.acnnewswire.com
From the Asia Corporate News Network
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