CLIQ to buy 51% stake in two assets in Khazakhstan

CLIQ Energy Bhd has proposed to acquire two oil producing field assets in Kazakhstan from Phystech Firm LLP for US$117.3mil (RM433.5mil).

The special purpose acquisition company (SPAC) has entered into a conditional sales and purchase agreement (SPA) with Phystech to buy a 51% stake in a special purpose vehicle (SPV), which will comprise two oil field blocks in the Karazhanbas Northern Field concession area.

At a briefing yesterday, managing director and chief executive officer Ziyad Elias said the acquisition, if approved, would see CLIQ graduating from a SPAC to a junior independent exploration and production (E&P) company.

“Kazakhstan is a prolific oil and gas country … This is a country where there are active E&P activities so there are a lot of opportunities. And they are already proven in the sense that there are a lot of international majors and big players that are already operating in Kazakhstan,” said Ziyad, on why CLIQ was choosing to invest there.

Under the agreement, the two assets will be transferred to the SPV, following which, the SPV will seek to list on the Kazakhstan Stock Exchange.

At the moment, the fields are wholly-owned and operated by Phystech, a company incorporated in Kazakhstan. The general director of Phystech is Daribekov Adil Maratovich.

CLIQ will pay Phystech US$90mil (RM332.6mil), while the remaining US$27.3mil will be deferred to the end of the third year after the SPA is completed.

As part of the agreement, Phystech will provide US$30mil as working capital financing for the first year.

According to CLIQ’s filing with Bursa, the acquisition price of US$117.3mil represents a discount to the assets indicative valuation of US$262.4mil, which assumes the development on the fields are implemented.

The acquisition will see CLIQ owning majority control in the SPV, which will have full ownership and operatorship of two partial oil field blocks, namely block XXXII-II-A and block XXXII-II-B. The two assets have 39.5 million barrels in oil reserves, of which, 20.1 million is CLIQ’s share.

“The oil fields’ current production is being sold to an offtaker called Titan Trading at fair market value,” he said.

The company plans to increase production at the oilfields by more than five times by 2020. “We are looking to ramp up production from 1,400 barrels per day to 7,500 barrels per day in five year’s time,” said Ziyad.

It will achieve this by improving the oil fields’ facilities, as well as by adding more production wells.

He plans to add 400 new wells at the onshore shallow reservoir, from 90 wells currently. The Karazhanbas Northern Field covers 78.8 sq km with a drill depth of less than 1,000 m.

“The condition of the surface is easy to work on. It’s not in a harsh environment. The only thing is the big temperature change.

“It can go up to minus 20 degrees in winter and in summer up to about 50 degrees,” Ziyad said.

The company would still has to obtain approvals from the Securities Commission as well as its shareholders.

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