energy
Zhaikmunai plans to raise additional $300 million on LSE
(SRI) - Zhaikmunai, an independent Kazakh oil producer, said it plans to raise $300 million on the London Stock Exchange (LSE) to refinance debt and fund capital expenditures.
“The proceeds of the placing will be used to supplement the group’s existing credit facilities and fund in part the capital expenditure program for the Chinarevskoye field, in particular the completion of the gas treatment unit,” Zhaikmunai said in a statement.
Zhaikmunai also announced it was in talks with creditors about possible waivers on its debt covenants after a $100 million credit line was cut off. Reportedly, the final $100 million tranche of a $550 million credit line led by BNP Paribas was not syndicated and there were “various events of default outstanding under the facility” which resulted in only $382 of the credit line million being drawn down. Zhaikmunai said it continues negotiations with its existing lenders under the facility and hopes to achieve a successful conclusion by July.
Zhaikmunai produced 7,615 barrels per day in the first quarter of this year, a 23-percent increase compared to the first quarter in 2008. It plans to bring output to 48,000 barrels per day in 2010 once its planned gas treatment unit is operation and additional wells are drilled.
“Notwithstanding the lower oil prices we had a good quarter considering the increase in production, the reconfirmation of the reserves and the flawless operation of our new facilities (pipeline and rail terminal). In terms of financing there has also been good progress. We are looking forward to being able to sign an amended facility agreement with our existing lenders and we are confident that we will successfully secure the necessary financing for the business,” Zhaikmunai’s CEO Kai Uwe Kessel said in a statement.
In 2007 Zhaikmunai, controlled by Belgian private equity firm Probel Capital Management, raised $100 million by selling a 9 percent stake on the LSE. In April of this year, Reuters reported TNK-BP, a Russian oil producer jointly owned by British BP and a trio of Russian oligarchs, planned to make a bid for Zhaikmunai.
Zhaikmunai’s main asset is the 324 sq. km Chinarevskoye field in western Kazakhstan. Its reserves are estimated at 755 million barrels of oil equivalent.
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What capex projects will be funded?
“The proceeds of the placing will be used to supplement the group’s existing credit facilities and fund in part the capital expenditure program for the Chinarevskoye field, in particular the completion of the gas treatment unit,” Zhaikmunai said in a statement.