(MENAFN- Iraq Business News)
By John Lee.
Canada's Shamaran Petroleum and US's HKN Energy are to aquire Abu Dhabi National Energy Company (TAQA) 's interest in the Atrush oilfield in Iraqi Kurdistan.
In a regulatory statement on Monday, TAQA said:
"... Abu Dhabi National Energy Company PJSC ("TAQA") has, through its wholly-owned subsidiary, TAQA International BV, entered into definitive agreements with General Exploration Partners Inc. ("GEP") to sell all of its interest in the Atrush oil field in the Kurdistan Region of Iraq.
"This transaction remains subject to obtaining third-party approvals."
Shamaran provided more details, saying that it will increase its indirect working interest in the Atrush Block from 27.6 percent to 50 percent, with HKN Energy IV, Ltd. ("HKN IV"), an affiliate of HKN Energy Ltd. ("HKN"), indirectly acquiring a 25-percent working interest and operatorship.
Garrett Soden, President and CEO of ShaMaran, commented:
"This transaction continues ShaMaran's consolidation strategy in Kurdistan. We are acquiring TAQA's 47.4% interest in Atrush and selling a 25% interest and operatorship to HKN IV. ShaMaran and HKN are already co-venturers in the adjoining Sarsang block operated by HKN. We look forward to working together at Atrush to realize significant synergies on both blocks."
A statement from HKN Energy, a privately-held oil company founded in 2007 by Ross Perot Jr, added:
"... we expect to realizen synergies and cost savings that benefit both the Sarsang and Atrush blocks. We anticipate a smooth transition without any interruption in petroleum operations for the Sarsang and Atrush blocks."
Full statement from Shamaran Petroleum:
ShaMaran Petroleum Corp. ("ShaMaran" or the "Company") (TSXV: SNM) (Nasdaq First North: SNM) has entered into definitive agreements for a two-step transaction to increase its indirect working interest in the Atrush Block in Kurdistan from 27.6% to 50%, with HKN Energy IV, Ltd. ("HKN IV"), an affiliate of HKN Energy Ltd. ("HKN"), indirectly acquiring a 25% working interest and operatorship, subject to required approvals. View PDF
Garrett Soden, President and CEO of ShaMaran, commented: "This transaction continues ShaMaran's consolidation strategy in Kurdistan. We are acquiring TAQA's 47.4% interest in Atrush and selling a 25% interest and operatorship to HKN IV. ShaMaran and HKN are already co-venturers in the adjoining Sarsang block operated by HKN. We look forward to working together at Atrush to realize significant synergies on both blocks."
In the first step of the transaction, ShaMaran's wholly-owned Cayman subsidiary, General Exploration Partners, Inc. ("GEP"), entered into an agreement with TAQA International B.V. ("TIBV"), a subsidiary of Abu Dhabi National Energy Company PJSC ("TAQA"), to acquire TAQA Atrush B.V. ("TABV") ("Step 1"). TABV is a Dutch holding company with a 47.4% working interest and operatorship in the Atrush Production Sharing Contract in Kurdistan ("Atrush PSC"). Step 1 is subject to customary closing conditions for a share sale and purchase agreement in the Netherlands and customary stock exchange approvals in Canada.
At closing of Step 1, HKN IV will begin operating Atrush on a fee basis in contemplation of the second step of the transaction. The appointment of HKN IV as operator is subject to review by the Ministry of Natural Resources in Kurdistan.
In the second step of the transaction, TABV will transfer a 25% working interest in the Atrush PSC to GEP2, a new Cayman wholly-owned subsidiary of GEP. In parallel, GEP has entered into an agreement to sell GEP2 to HKN IV for nominal consideration such that HKN IV will hold a 25% working interest and operatorship in the Atrush PSC ("Step 2"). The sale of GEP2 to HKN IV will be subject to approval by the Kurdistan Regional Government ("KRG").
After closing the above transaction steps, the Atrush Block will have the following parties: GEP 50%, HKN IV (through GEP2) 25% and KRG 25%.
Full statement from HKN Energy:
HKN Energy IV, Ltd. ("HKN IV"), an affiliate of HKN Energy Ltd. ("HKN"), has entered into a definitive agreement to acquire GEP2, Ltd. ("GEP2"), a wholly owned subsidiary of General Exploration Partners, Inc. ("GEP"), which in turn is a wholly owned subsidiary of ShaMaran Petroleum Corp. ("ShaMaran"). At closing, GEP2 will hold a 25% working interest in, and operatorship of, the Atrush Block in Kurdistan following a transaction between ShaMaran and TAQA International B.V. ("TIBV"). The acquisition of GEP2 is subject to approval by the Kurdistan Regional Government ("KRG").
Concurrent with the closing of the transaction between ShaMaran and TIBV, HKN IV will begin operating Atrush on a fee basis in contemplation of closing the acquisition of GEP2. After the acquisition of GEP2 closes, the Atrush PSC will have the following parties: GEP 50%, HKN IV (through GEP2) 25%, and KRG 25%.
HKN IV is a sister company to HKN and its ownership interest in and operatorship of the Atrush Block do not directly impact HKN or HKN Energy III, Ltd. Working together with ShaMaran, we expect to realize synergies and cost savings that benefit both the Sarsang and Atrush blocks. We anticipate a smooth transition without any interruption in petroleum operations for the Sarsang and Atrush blocks.
(Sources: Shamaran Petroleum, HKN Energy, TAQA)
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