REG - Roxi Petroleum Plc - Update on the sale of Galaz <Origin Href="QuoteRef">RXP.L</Origin>

Caspian SunriseAnnouncement

15/07/2015 18:37

RNS Number : 8014N
Roxi Petroleum Plc
20 May 2015
Roxi Petroleum PLC
("Roxi" or the "Company")
Update on the sale of Galaz
Further to the announcement of 10 February 2015, Roxi, the Central Asian oil and gas company with a focus on Kazakhstan, is pleased to announce that the sale of the Company's equity and debt interests in the Galaz Contract Area to a consortium led by Xinjiang Zhundong Petroleum Technology Co, a Chinese publicly traded conglomerate, (the "Galaz Disposal"), is proceeding as planned and is now expected to complete by 31 May 2015.
Following the recent rise in the price of Brent crude the total proceeds of Galaz Disposal will now be $100 million and the net proceeds attributable to Roxi will now be approximately $23 million.
$2 million of the aggregate purchase consideration will be retained by the purchaser for a period of 12 months to cover warranty claims individually greater than $50,000. Roxi's share of this retention will be $0.68 million.
Impact on Roxi
Once received, Roxi plans to use the proceeds of the Galaz Disposal to fund all of the planned development in 2015 at the Company's flagship asset BNG.
Additionally, as previously announced, under the terms of the 2008 acquisition of 59% of Eragon Petroleum PLC ("Eragon") from Baverstock, Roxi had an obligation to carry Baverstock for the first $100 million of costs on the Eragon assets (BNG, Galaz & Munaily). This obligation has now been fulfilled and the responsibility for further development funding for the Eragon assets (principally BNG) will be in the ratio 59:41 between Roxi and Baverstock..
The net amount attributable to Baverstock from the Galaz Disposal is approximately $11 million. Together with the $23. million attributable to Roxi this will provide approximately $34 million to develop BNG. 
The expected profit after tax on the disposal of Galaz to be included in the 2015 Roxi financial statements is approximately $17 million.
Further announcements regarding the progress of the sale will be made in due course.
Comment:
Clive Carver, Chairman said
"We are pleased to have moved without undue delay from the announcement of the sale of our interests in Galaz in February to expected completion in May. We believe this demonstrates the advantages of being based locally with a good understanding of the regulations.
The funds, once released from the sale of Galaz, will cover our BNG work programme for 2015, which we hope will lead to the an appreciation in the value of the Group without dilution for Roxi shareholders."
Enquiries:
Roxi Petroleum PLC
Clive Carver, Chairman
+7 727 375 0202
WH Ireland
Nominated Adviser & Broker
James Joyce / James Bavister
+44 207 220 1666

This information is provided by RNS
The company news service from the London Stock Exchange
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