PJSC “RUSSNEFT” WILL PURCHASE $270 MLN FORTEINVEST ASSETS AFTER IPO
After IPO at MOEX PJSC “RussNeft” intends to purchase three oil assets in Orenburg region from its major shareholder Mikhail Gutseriev. The deal value is $270 MLN and it exceeds the funds available on PJSC “RussNeft” accounts fivefold.
Planning to perform IPO at MOEX by late 2016” PJSC “RussNeft” has executed a Letter of Intent with Forteinvest (this Company, as “RussNeft”, is controlled by Mikhail Gutseriev structures) about the sale and purchase of the three assets in Orenburg region for $270 mln, the materials of the oil company report.
It refers to the purchase from Forteinvest of 100% of Preobrazhenskneft, Oilgasteta and Kalish Services Limited which owns Geoprogress.
Preobrazhenskneft develops Kolganskoye field (its oil production output is expected at 226 thous. tons in 2016), Oilgaztet develops Ashirobskoye field (the amount of resources is 14.7 mln tons), Geoprogress owns licenses for Stepnoy and Aleksandrovsky sites.
Should Sberbank, Forteinvest creditor, approve of the deal, it is intended to be completed by April 1, 2017. This company also owns Orsky NPZ (oil processing plant) processing 6 mln tons, but it will not be included in the deal. PJSC “RussNeft” representative didn’t disclose Forteinvest credit amount from Sberbank, the bank’s press-office
“Synergy from obtaining Forteinvest assets means that within 2017-2022 the company will drill the assets with the proved geology and increases production”, the company says. According to 2015 results PJSC “RussNeft” produced 7.4 mln tons, in 2016 production reduced to 7.03 mln tons. Together with Forteinvest and GEA which owns licenses for oil production in Azerbaijan (PJSC “RussNeft” acquired it in 2014) production will be increased up to 8.1 mln tons, the document says.
Agreement on the purchase of producing assets in Orenburg region is the result of the long-term preparation process for IPO, PJSC “RussNeft” representative says. Forteinvest producing assets are an ideal add-in to the growth strategy of the company, he says. 68% of PJSC “RussNeft” production was concentrated in West Siberia in 2015, but the second important region for the company is Volga region (21% of production), exactly where Forteinvest assets are located.
PJSC “RussNeft” representative did not comment on who will finance this deal. It is Belyrian Holdings, owned by Gutseriev (owns 67% of ordinary shares), that will sell the shares during , it intends to sell up to 20% of shares with the Company’s shares evaluated at $4–5 bn. It is not intended to raise the funds for the Company itself, follows from the abovementioned information of company. Meanwhile PJSC “RussNeft” accounts had $58 mln as of September 30.