KUALA LUMPUR (March 8): SUMATEC RESOURCES BHD [] had sealed a joint investment agreement to extract hydrocarbon in the Rakushechnoye oil and gas field (Shelly oil field) in Kazakhstan.
It said on Thursday the other parties which had signed the agreement were Markmore Energy (Labuan) Ltd and CaspiOilGas LLP (COG).
The scope of work for Sumatec would all the operations related to the production of hydrocarbon from the Shelly oil field for and on behalf of COG.
It was also tasked to complete all operations to develop the Shelly Oil Field within the period from the date of the agreement up to Aug 25, 2025.
Under the agreement, Sumatec would pay MELL a non-recoverable signature bonus of US$10 million by April 30, 2012 or any such time as may be mutually agreed by the parties.
Sumatec would also pay to MELL a non recoverable costs reimbursement of US$85 million.
It would also have to place with COG a refundable performance deposit of US$40 million for the due and satisfactory performance of the petroleum operations.
It would also have to pay oil royalty to COG at US$5 per barrel of the crude oil production and shall be offset against the performance deposit. The royalty for gas/natural Gas shall be mutually determined by the parties as soon as it becomes practicable.
As part of the agreement, MELL would provide Sumatec an advance for capital cost up to US$60 million to develop the Shelly oil field.
The distribution of profit between COG and Sumatec would be when the net production reaching a threshold of two million barrels within two years from the payment date.
Under the agreement, Sumatec would be entitled to 100% of the profit for the first and second year and by the third year, it would be on a 50:50 basis.
“The company will fund the payments required under the JIA and working capital for the development of the Shelly oil field from the proceeds of the fund raising exercise envisaged under the proposed regularisation plan,” it said.
It said on Thursday the other parties which had signed the agreement were Markmore Energy (Labuan) Ltd and CaspiOilGas LLP (COG).
The scope of work for Sumatec would all the operations related to the production of hydrocarbon from the Shelly oil field for and on behalf of COG.
It was also tasked to complete all operations to develop the Shelly Oil Field within the period from the date of the agreement up to Aug 25, 2025.
Under the agreement, Sumatec would pay MELL a non-recoverable signature bonus of US$10 million by April 30, 2012 or any such time as may be mutually agreed by the parties.
Sumatec would also pay to MELL a non recoverable costs reimbursement of US$85 million.
It would also have to place with COG a refundable performance deposit of US$40 million for the due and satisfactory performance of the petroleum operations.
It would also have to pay oil royalty to COG at US$5 per barrel of the crude oil production and shall be offset against the performance deposit. The royalty for gas/natural Gas shall be mutually determined by the parties as soon as it becomes practicable.
As part of the agreement, MELL would provide Sumatec an advance for capital cost up to US$60 million to develop the Shelly oil field.
The distribution of profit between COG and Sumatec would be when the net production reaching a threshold of two million barrels within two years from the payment date.
Under the agreement, Sumatec would be entitled to 100% of the profit for the first and second year and by the third year, it would be on a 50:50 basis.
“The company will fund the payments required under the JIA and working capital for the development of the Shelly oil field from the proceeds of the fund raising exercise envisaged under the proposed regularisation plan,” it said.
