ShaMaran Petroleum 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, an affiliate of HKN Energy, indirectly acquiring a 25% working interest and operatorship, subject to required approvals.
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%.
Source: ShaMaran
