Press Releases

KRT-OilGasTrans assessment results and revised terms for acquisition

13.12.2011

Results of the assessment of Target’s reserves and resources and revised terms for acquisition of the Target in Perm

In July 2011 Selena Oil & Gas Holding AB (SOGH) signed a preliminary purchase agreement for acquisition of the Target in Perm region through its subsidiary Selena Oil & Gas AB (SOG). SOGH is pleased to announce that final purchase agreement has been concluded in relation to the acquisition.

The Target company is KRT-OilGasTrans together with its three subsidiaries (KRT-OGT). KRT-OGT holds 6 licenses: 4 oil field exploration and development licenses and 2 search-appraisal licenses. SOG has completed the DeGolyer & MacNaughton Competent Person assessment of the KRT-OGT reserves by the status as of 30 June 2011. According to the report KRT-OGT reserves are:

•    Total 1P reserves equal to 8.5 Mmboe (million barrels of oil equivalent)
•    Total 2P reserves equal to 18.7 Mmboe
•    Total 3P reserves equal to 35.1 Mmboe
•    Prospective resources equal to 17.5 Mmboe

KRT-OGT currently has no production and revenue; however, the management anticipates start of the production in 2012 provided sufficient financing.

SOG has also re-negotiated the terms of the transaction. According to the revised purchase agreement the total purchase price of the transaction will range between 9.4 and 10.8 million USD and the agreement allows for partial or full settlement of purchase price in shares of SOGH. The buyer will designate a third party to deliver shares in SOGH, which will in turn be settled through a new issue of shares. The shares will be attributed a value of 8 SEK per share and regardless of the chosen settlement option 3.8 million of the shares will have a 6-months lock-up period restricting their sale. The closing of the transaction, subject to confirmatory due diligence, is agreed for 31 December 2011. Based on the purchase price the 2P valuation multiple for the transaction range between 0.50 and 0.58 USD per barrel of 2P reserve.

The transaction will further widen the shareholder base of SOGH. Mr. Yuriy Gusev, the seller of KRT-OGT, is the owner and CEO of KRT Group. “I am pleased to find a strong strategic partner for the development of oil and gas assets. KRT-OGT fields are close to SOGH fields; SOGH has a developed infrastructure and production organization. In addition, SOGH is well on a way to get connected to GAZPROPM pipeline. That provides great potential for synergies”, says Mr. Yuriy Gusev, seller of KRT-OGT.
After the completion of the acquisition total 1P reserves of SOGH will amount to 19.6 Mmboe, 2P reserves – 41.3 Mmboe, 3P reserves – 66.9 Mmboe and prospective resources will amount to 107.8 Mmboe.

For further information, please contact:
Indrek Rahumaa, Chairman of the Board, phone +372 509 2080 or +7 (916) 180 31 62,
e-mail: indrek.rahumaa@selenaoil.com

Selena Oil & Gas Holding AB (publ) (former Emitor Holding AB) is engaged in the production and transportation of oil and gas in the Volga-Ural region in the Russian Federation, including Perm and Udmurtia. The company is listed on NASDAQ OMX First North Premier in Stockholm under the ticker SOGH. Mangold Fondkommission is the company´s Certified Adviser and liquidity provider, telephone +46 8-503 015 50. 

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