Zhaikmunai L.P. announces intention to launch global offering
THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA.
This announcement is an advertisement and not a Prospectus and investors should not subscribe for or purchase any common units representing partnership interests or other securities referred to in this announcement except on the basis of information in the prospectus to be published by Zhaikmunai L.P. in due course in connection with the admission of its common units or other securities to the Official List of the Financial Services Authority. Copies of the prospectus will, following publication, be
available from Zhaikmunai L.P.’s principal place of business. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any common units or other securities of Zhaikmunai L.P., nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of Zhaikmunai L.P.
Zhaikmunai L.P. announces intention to launch global offering
London, 5 November 2007: Zhaikmunai L.P. (‘Zhaikmunai’ or the ‘Partnership’), an independent oil and gas exploration and production business operating in north-western Kazakhstan, today announces its intention to proceed with a global offering of its securities (the ‘Offering’). The securities will consist of common units representing partnership interests which will be offered in the form of global depositary receipts (‘GDRs’) by the Partnership and its unit holders to institutional investors. The GDRs are expected to be listed on the London Stock Exchange towards the end of 2007.
ING has been appointed as the lead manager and bookrunner for the Offering. Mirabaud Securities and Unicredit Markets & Investment Banking (CA IB Corporate Finance Limited) have been appointed as co-lead managers.
Commenting on today’s announcement, Mr. Frank Monstrey, the chairman of Zhaikmunai, said:
‘This global offering marks an exciting stage in Zhaikmunai’s development. We have a strong, high-quality reserve base, good upside potential and a proven management team. The listing will help Zhaikmunai to achieve its goals of increasing oil production, improving the existing reserve base, exploiting our gas reserves and improving transport links.’
Notes to editors
Kazakhstan ranks ninth in the world by oil reserves and eleventh by oil and gas reserves and is the second biggest oil producer (after Russia) among the former Soviet republics. It has the Caspian region’s largest recoverable crude oil reserves. Kazakhstan’s proved oil and gas reserves amounted to 39.8 billion barrels and 105.9 trillion cubic feet respectively as of 31 December, 2006, according to the BP Statistical Review.
About the Group
Zhaikmunai’s name is derived from ‘Zhaik’, being the Kazakh name for the Ural River, and ‘munai’ which means oil or hydrocarbon in Kazakh. The Partnership is the indirect holding company of an independent oil and gas business (the ‘Group’) engaged in the exploration, production and sale of crude oil and gas condensate in north-western Kazakhstan. The Group’s licence area is the Chinarevskoye field which is located in the northern part of the oil-rich Pre-Caspian Basin, one of the largest oil producing regions in central Asia. The Group entered into a Production Sharing Agreement with the Republic of Kazakhstan in 1997.
The Chinarevskoye field is near to the Kazakhstan-Russian border and close to several major pipelines. Based on a reserve report prepared by Ryder Scott, Zhaikmunai’s estimated gross proved plus probable hydrocarbon reserves as at 1 July 2007 were to 397 million boe. ‘Gross’ refers to such amount being inclusive of royalties and amounts due in kind or cash to the Kazakhstan government under the Production Sharing Agreement. Zhaikmunai began production in 2000 and produced just over 1 million barrels of crude oil in 2006. Currently all crude oil production is exported. Gas sales are expected to begin following completion of a gas treatment facility by October, 2008. The Group has 14 existing wells and four exploration wells under drilling and has invested approximately $230m in drilling and field infrastructure since its current management took control in 2004.
For the first seven months of 2007, the Group had revenues of $52.7m and EBITDA of $32.7m compared with revenues of $30.2m and EBITDA of $25.1m in the same period of 2006. The Group currently transports its crude oil by truck to a rail loading terminal 100km away in Uralsk, close to the Russian border. Zhaikmunai is now constructing an oil pipeline from the Chinarevskoye field to the rail connection near Uralsk along with a new receiving oil loading terminal at this connection which will allow it to deliver its oil directly to the loading terminal for export by rail.
About the management
Mr. Frank Monstrey, 42, chairman of Zhaikmunai L.P., has 20 years experience in corporate finance and private equity and has been active in Kazakhstan since 1994. He is supported by a highly experienced management team led by Zhaikmunai’s chief executive Mr. Kai-Uwe Kessel.
A graduate of the Moscow Academy of Oil and Gas, the German-born Mr Kessel has worked in the industry for 22 years and has held senior positions with EEG (Germany), Gaz de France and the Kazakhstan joint venture Kazgermunai, where he was member and chairman of the Board from 1993 to 2003.
Mark Martin +44 20 7767 1000
Michael Harrison +44 20 7404 5959
Some of the statements in this document are forward-looking. Forward-looking statements include statements regarding the intent, belief and current expectations of the Partnership or its officers with respect to various matters. When used in this document, the words ‘expects,’ ‘believes,’ ‘anticipates,’ ‘plans,’ ‘may,’ ‘will,’ ‘should’ and similar expressions, and the negatives thereof, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcome to differ materially from those suggested by any such statements. Those factors include, but are not limited to risks or uncertainties, described in the Partnership’s publicly filed documents.
These forward-looking statements speak only as of the date of this document. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Partnership’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.
These materials are not an offer for sale of the securities in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. The Partnership does not intend to register any portion of the offering in the United States or to conduct a public offering of the securities in the United States.
This communication is directed only at (i) persons who are outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the ‘Order’) and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as ‘relevant persons’). Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
ING, Mirabaud Securities and Unicredit Markets & Investment Banking (CA IB Corporate Finance Limited) are acting exclusively for the Partnership and no one else in connection with the Offering. They will not regard any other person (whether or not a recipient of this announcement) as their respective clients and will not be responsible to anyone other than the Partnership for providing the protections afforded to their respective clients nor for giving advice in relation to the Offering, the contents of this announcement or any transaction or arrangement referred to herein.