Thursday, Caspian Sunrise PLC announced the sale of its shallow BNG MJF and South Yelemes structures for a headline cash consideration of approximately $88 million to Absolute Resources LLP. The disposal, which is subject to certain conditions, will see Caspian Sunrise retain ownership of the deep structures within the BNG Contract Area, including Airshagyl and Yelemes Deep.
The MJF structure has been a significant contributor to the Group's oil production since 2016, while the South Yelemes structure was awarded its own export license in 2021. The initial agreement for the sale was announced on May 14, 2024, with a proposed cash consideration of approximately $83 million. Following negotiations, the purchase price was increased to the current amount of $88 million, and a binding term sheet was entered into on September 3, 2024.
The disposal will be carried out through the sale of the entire issued share capital of a newly incorporated entity, established in the Astana International Finance Centre, to which the relevant subsoil use contracts will be transferred. The cash consideration will be paid in the Kazakhstan Tenge equivalent of $88 million, with $14 million already received and the remainder to be paid upon completion and over a subsequent 120-day period, with certain adjustments for outstanding Kazakh Government assessed historical costs.
Completion of the sale is conditional upon Absolute Resources obtaining necessary antimonopoly and governmental consents in Kazakhstan, securing debt-financing for the outstanding consideration, and no material adverse changes occurring to the business or assets related to the shallow structures prior to completion. The deadline for meeting these conditions is set for December 31, 2024, with provisions for negotiating a new deadline if necessary.
In addition to the disposal update, Caspian Sunrise provided an operational update, noting that drilling at the BNG Contract Area will cease in anticipation of the sale, with plans to reallocate rigs to develop the West Shalva and Block 8 contract areas. The West Shalva acquisition is moving towards completion following the receipt of change of control consent, and production resumption at the Sholkara structure of Block 8 is expected to commence by the end of Q4 2024.
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