Cancellation of 35 per cent sale of the BNG Asset

RNS Number : 3346G

Roxi Petroleum Plc

11 May 2011

 



For immediate release                                                                                                                                            11 May 2011

Roxi Petroleum plc

Cancellation of 35 per cent sale of the BNG Asset

Roxi Petroleum Plc and its subsidiary BNG Energy BV ("Roxi" ), the Central Asian oil and gas company with a focus on Kazakhstan, announces that it has cancelled the deal in respect of the sale of a 35 per cent interest in BNG Ltd LLP, the operator of the BNG Contract Area.

The interest was originally sold to Canamens BNG BV ("Canamens") in 2009 and has now been cancelled and transferred back to Roxi together with all rights under the sale and purchase agreement.

Additionally, Roxi has agreed to repay US$2.5 million of loans due to Canamens.  Canamens then agreed to novate to Roxi all its interest in remaining loans due by BNG ltd LLP to Canamens, in return for a 1.5 per cent overriding royalty payable to Canamens, based on the value of sales from future production under the existing Sub-Surface User Contract and subsequent Production Contracts.  

Roxi will hold an effective interest of 58.41 per cent of the BNG Asset as a result of this and has effectively resumed operational and financial control of all exploration and production activities at BNG.

Roxi funding

Mr Oraziman has agreed to defer repayment for 12 months to June 2012 of his loan to Roxi of in aggregate US$4.55 million in return for this loan becoming interest bearing at a rate of 12 per cent per annum. In addition to this Mr Oraziman agreed to extend his other loan to Galaz Energy BV of US$5 million for 12 further months to 1 July 2012.

Vertom International NV, a company controlled by Mr Oraziman, has  entered into a new loan facility with Roxi for $6 million, which will be interest bearing at the rate of 12 per cent per annum to help finance some of the ongoing work obligations for the Group.

As Mr Oraziman is a director of the Company the variation to his loans and the entering into the new loan facility are related party transactions. It is the view of all the Independent Directors, being all the directors except Mr Oraziman, having consulted with its nominated adviser, Matrix Corporate Capital LLP, that the terms of the transactions with Mr Oraziman are fair and reasonable insofar as its shareholders are concerned.

David Wilkes, CEO of Roxi Petroleum

"I am delighted that we have concluded our negotiations on the future of BNG in such a positive way for Roxi shareholders. We believe there is an exciting future for the BNG asset and are pleased to have resumed majority ownership and operational and financial control of its development.

 I would like to thank Canamens for all their contributions over the past couple of years in the development of the BNG asset and for the constructive and professional manner in which the exit negotiations were conducted."

Enquiries

Roxi Petroleum plc
David Wilkes CEO
[phone]

Matrix Corporate Capital LLP (NOMAD and broker)
Stephen Mischler/ Ed Cozens
[phone]

Buchanan Communications (Financial PR)
Tim Thompson / Ben Romney
[phone]

 

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