December 16, 2013 14:56
Abramovich's son pays $180 mln for Vostok Energy
MOSCOW. Dec 16 (Interfax) - Zoltav Resources, a subsidiary of ARA Capital, the company of billionaire Roman Abramovich's son Arkady Abramovich, has acquired control of Vostok Energy, a UK-based oil and gas producer with assets in Saratov region, for $180 million, Zoltav said in a press release.
Zoltav purchased Cyprus-registered Royal Atlantic Energy from its second biggest shareholder, Bandbear Limited. Royal Atlantic owns Diall Alliance, which holds the license to the Bortovoi gas section in the Volga area and its management company, Vostok Energy.
Zoltav said earlier that it intended to expand its oil business in Russia. The company signed a letter of intent with Bandbear to buy oil and gas assets in Russia from Bandbear.
Sources told Interfax later that Zoltav had purchased Vostok Energy. One of the sources said Vostok Energy's shareholders had been looking for a buyer for a long time. During presale preparations, they were asking for $140 million for the company including its debt of $160 million, the source said without disclosing the final price.
Zoltav said in the press release it would pay $77.5 million in cash and $42.5 million in supplementary shares - 26.563 million shares valued at $1.60 each. In addition, Zoltav will assume up to $60 million in debt attributable to Bandbear.
Bortovoi contains proven and probable (2P) reserves totaling 22.4 billion cubic meters of gas and 12.4 million barrels of oil and condensate as of May 1, 2012.
Vostok Energy holds the license to the Bortovoi block, which covers over 3,000 square kilometers and includes ten fields. It is located along the northern border of the Peri-Caspian oil and gas province.
Zoltav's first oil asset was CenGeo Holdings Ltd, which owns the Koltogor block in Western Siberia through subsidiary Siberian Geological Company. Zoltav bought the company for $26 million and plans to invest another $20 million in the development of the block, which has 1P reserves estimated at 73.5 million barrels (about 10 million tonnes). ARA Capital owns a 38.6% stake in Zoltav, but its stake in the oil company will rise to 45% by April 1. Bandbear owns 32.5% of Zoltav.
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