Tethys Petroleum has entered into an agreement with SinoHan Oil and Gas Investment, a subsidiary of China-based HanHong, to sell 50% of its Kazakh oil and gas assets. Tethys will get an initial payment of $75m for the sale, as part of the transaction. Under the deal, SinoHan will buy a 50% stake including one share in Tethys Kazakhstan SPRL (TK SPRL), which is a fully-owned subsidiary of Tethys.
TK SPRL has 100% interest in TethysAralGaz, which owns 100% stake in Kyzyloi Gas production and Akkulka exploration contracts. Additionally, TK SPRL holds 100% interest in Kul-Bas, which holds 100% stake in Kul-Bas exploration and production contract, as well as in Tethys Services Kazakhstan and Transcontinental Oil Transportation SPRL that has 50% interest in Aral Oil Terminal. Tethys will continue as the operator of the Kazakh assets and both partners have equal board representation in TK SPRL.
The company will use the cash from the transaction to maintain 50% holding in producing asset with significant upside, and to fund for accelerated work program in Kazakhstan.
Tethys Petroleum chairman and president David Robson said the company has agreed a bonus payment system which gives further cash payments based on the success on firm's 2013 and 2014 drilling program in adding reserves. "Of course, we still own 50% and will also share the success of any further discoveries through this equity ownership as well," Robson added.
Tethys now owns oil and gas exploration and production activities in the Republics of Kazakhstan, Tajikistan, Uzbekistan and potential interests in the Republic of Georgia.
TK SPRL has 100% interest in TethysAralGaz, which owns 100% stake in Kyzyloi Gas production and Akkulka exploration contracts. Additionally, TK SPRL holds 100% interest in Kul-Bas, which holds 100% stake in Kul-Bas exploration and production contract, as well as in Tethys Services Kazakhstan and Transcontinental Oil Transportation SPRL that has 50% interest in Aral Oil Terminal. Tethys will continue as the operator of the Kazakh assets and both partners have equal board representation in TK SPRL.
The company will use the cash from the transaction to maintain 50% holding in producing asset with significant upside, and to fund for accelerated work program in Kazakhstan.
Tethys Petroleum chairman and president David Robson said the company has agreed a bonus payment system which gives further cash payments based on the success on firm's 2013 and 2014 drilling program in adding reserves. "Of course, we still own 50% and will also share the success of any further discoveries through this equity ownership as well," Robson added.
Tethys now owns oil and gas exploration and production activities in the Republics of Kazakhstan, Tajikistan, Uzbekistan and potential interests in the Republic of Georgia.