Yukos gets gas for $190 million
4 Mar 2002
The Yukos Oil Company has signed a series of agreements under which it will purchase Benton Oil and Gas Company's 68% interest in the Arctic Gas Company, as well as an additional 20% from Arctic Gas's minority shareholders. The result will be that Yukos will end up holding an aggregate of 88% of Arctic Gas's total outstanding shares.
The total purchase price for the Benton Oil and Gas Company interest is approximately $190 million, including the repayment of certain Arctic Gas liabilities. Yukos has also assumed Benton's obligations to provide or arrange for up to $100 million of financing to Arctic Gas. The remaining 12% interest in Arctic Gas is held by Gazprom.
The acquisition remains subject to the approval of the Antimonopoly Ministry and Support for Entrepreneurship of the Russian Federation.
Arctic Gas holds exploration and development licenses for the Samburgskoye, Neponyatnoye, Severo-Esetinskoye, Urengoyskoye, Vostochno-Urengoyskoye, and Evo-Yakhinskoye fields in the Yamalo-Nenets Autonomous Area.
It is anticipated that during 2002, annual production at the Samburgskoye field will reach 1 billion cubic metres of gas and 300,000 tons of condensate. The production level is expected to increase 2.5 times by 2005.
Commercial operations in the Evo-Yakhinsky field are to start up in 2004, and by 2005, annual production will reach 1 billion cubic meters of gas and 200,000 tons of condensate.
Yukos estimates that the total recoverable proven reserves of its 88% interest in the Arctic Gas Company as of the end of 2000 are approximately 1.2 billion barrels of oil equivalent (BOE). Further exploration may increase this amount by as much as 4.4 billion BOE of recoverable reserves.
