Tethys Petroleum Farm-out on Kazakhstan Assets
Tethys Petroleum Limited has announced that it has entered into a definitive agreement for the sale of 50% of its Kazakh oil & gas assets to SinoHan Oil and Gas Investment B.V. ("SinoHan"), part of HanHong, a Beijing, PRC based private equity fund.
Under the terms of the agreement, SinoHan will acquire a 50% + 1 share in Tethys Kazakhstan SPRL ("TKSPRL"), the wholly owned subsidiary of Tethys which holds the Kazakh assets.
Tethys will receive an initial payment of USD 75 million, with additional performance bonus payments for the incremental discovery of 2P reserves achieved from the 2013 and 2014 drilling program, and also in profit sharing of excess profit at any exit by SinoHan from the project.
The sale is subject to Kazakh State approvals, including the waiver on pre - emption (Article 36). Closing will take place once these approvals are received.
HanHong Private Equity Management Company Limited was founded in August 2009 and registered in Tianjin China where it was granted the license specialized in dealing private equity management in November of the same year. HanHong has over US$1 billion under management.
Dr. David Robson, Chairman and President of Tethys, commented, "We are pleased with this transaction with SinoHan. As well as receiving a USD 75 million cash payment, we have agreed a bonus payment system that provides further cash payments based on the success on our 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. It makes sense to us at this stage of our corporate growth to bring in a partner to share 50% of the risk and funding in Kazakhstan, adding to a balanced portfolio company-wide where we have a joint venture with CNPC and Total in Tajikistan, and also a partner on our projects in Georgia. We believe we have further demonstrated our ability to attract reliable, strategic partners to our projects in order to ensure we are fully funded to maximise the returns for shareholders."
Mr Andrew Macintosh, Group CEO of HanHong Private Equity, commented, "HanHong Private Equity is dedicated to investment in natural resources around the world. Central Asia, especially Kazakhstan, is one of our focus areas. This investment marks the first major oil & gas investment by HanHong in Kazakhstan and we are most excited to form a partnership with Tethys Petroleum for its strong track record and excellent expertise in Central Asia. We strongly believe that the financial resources and Chinese connections of HanHong, together with the sector know-how of Tethys, will accelerate the success of our joint venture."