OREANDA-NEWS. On October 04, 2007 Exploration Production KazMunayGas JSC (Astana), whose shares are traded in the category "A" official listing of Kazakhstan stock exchange (KASE), had published the press-release in which the following information is given, reported the press-centre of KASE:

Exploration Production KazMunayGas JSC (EP KMG, the Company) has announced that the Company's Board of Directors had approved a series of deals of acquiring 50% stake in CITIC Canada Energy Limited ("CCEL") which was a 100% owner of CITIC Canada Petroleum Limited ("CCPL" - prior Nations Energy Company Ltd) from CITIC Group ("CITIC"), for approximately USD930 m. including the cost of purchase at USD875,5 m. and costs of financing to the amount of USD54,5 m. An approval of certain regulating organs was needed for this purchase. It is planned that the acquisition would have been finished by the end of the current year.

The purchase of 50% stake in CCEL by the Company is being conducted through the exercise of option, presented by CITIC company to National Company KazMunayGas JSC (EP KMG) in December of 2006 and transmitted by EP KMG in May of 2007. The cost of acquisition makes 50% of the sum that had been paid to CITIC by the previous owner of CCPL in December of 2006.

The main asset of CCPL is 94,6% of shareholders' equity and 100% control of votes in Karajanbasmunay (KBM), which is a big gas-and-oil producing company that exploits Karajanbas in the Western part of Kazakhstan. In accordance with the report of reserve cast by Miller and Lents Company, the total proved reserves of KBM as of January 1 of 2007 totaled about 363,8 m. barrels of oil. The extraction volume on the oilfield in 2006 made 2,3 m. tons (42,7 th. barrels of oil per 24 hours).

A part of the total cost of the purchase, USD150 m. will be financed at the expense of shareholders' capital of EP KMG. At that, EP KMG will own the right for primary income from the project to the amount of USD26,2 m. CITIC will provide the Company with financing with a restricted right of regress to finance the remaining part of the acquisition cost and of the other costs to finance the cost that would be comparable to financing cost of EP KMG. The management structures of CCEL and CCPL and also the base assets will include the representatives of the bother shareholders. The important questions such as deals with interest, annual operational program, budget, significant financial liabilities and significant supply contracts will require unanimous approval.

Commenting the deal, the general director of the Company Askar Baljanov noted: "With acquisition of Karajanbasmunay, we are continuing the implementation of our growth strategy, adding 10% more to our current exploration level. The given deal clearly demonstrates our ability to extend the resource base of the Company on favorable terms. We collaborate with CITIC closely in order to improve the exploiting characteristics of Karajanbasmunay oilfield".

Full version of the press release of Exploration Production KazMunayGas JSC is available on KASE's Web site at:
- http://www.kase.kz/emitters/scan/rdgz/rdgz_reliz_031007.pdf - in Russian;

- http://www.kase.kz/emitters/scan/rdgz/rdgz_reliz_031007e.pdf - in English.