KEYFACT Energy
Condor Petroleum Inc. announces the receipt of a further US$18.7 million of the sale proceeds for the Company’s previously announced sale of its Shoba and Taskuduk oilfields in Kazakhstan. In October 2019 the Company received an initial deposit of US$3.8 million of the total US$24.6 million sales proceeds. The remaining US$2.1 million is due within ten days following the signing of the addendums to the Shoba and Taskuduk production contracts by the Government of Kazakhstan, which is expected in the first quarter of 2020. All other consents and conditions for closing the transaction have been satisfied.
Don Streu, President and CEO of Condor commented “we’re extremely pleased that the Shoba and Taskuduk sales transactions are now almost complete. Having received the majority of the Kazakhstan sales proceeds, our strong balance sheet allows us to advance the Company’s strategic initiatives that include: completing a production sharing agreement for the five producing gas fields in Uzbekistan; paying down amounts owing under our existing credit facility; conducting additional activities to increase natural gas production in Turkey; and resuming Kazakhstan exploration activities once the 630 day exploration extension is formalized for the Zharkamys Contract”.
ZHARKAMYS CONTRACT
The Company’s Zharkamys Contract was due to expire on December 14, 2016. Prior to this date, the Kazakhstan Chamber of International Commerce and subsequently the Kazakhstan Civil Court confirmed that a force majeure event had occurred which, under Kazakhstan subsurface use law, can be the basis for the Zharkamys Contract validity period to be extended for a period of 630 days. In May 2017, the Kazakhstan Court of Appeal, pursuant to an appeal filed by the Ministry, ruled that the force majeure event was not recognized and reversed the decision of the Civil Court. The Company referred the case to the Kazakhstan Supreme Court and in November 2017 the Supreme Court ruling overturned both the Civil Court and the Court of Appeal rulings and referred the case back to the Civil Court for further review by a new panel of judges. In March 2018 the Civil Court ruling confirmed that the force majeure event had occurred. In April 2018 the Ministry appealed the Civil Court ruling and in May 2018 the Court of Appeal upheld the Civil Court ruling that the force majeure event had occurred. The Ministry did not appeal to the Supreme Court within the six months permitted by Kazakhstan law. The Company has submitted an application to the Ministry for the 630 day extension and expects the exploration period to the Zharkamys Contract to be extended during the first quarter of 2020.