29th Mar 2007 08:34
Matra Petroleum PLC29 March 2007 PRESS RELEASE For immediate release: 29 March 2007 Matra Petroleum plc ("Matra" or the "Company") Matra acquires exploration interest in Orenburg, Russian Federation and announces share placement In its first deal in the Russian Federation, Matra Petroleum, in return for theissue of 55,000,000 new shares, is to acquire the Arkhangelovskoe ExplorationLicence which is in close proximity to existing production near Orenburg. Thefirst exploration well is planned to commence in June 2007. Matra has alsoagreed, subject to shareholder approval, to issue 135,000,000 new ordinaryshares at 4.5p per share and 24,000,000 options exercisable at 8p/share, toDelek-International Energy Limited to raise £6.075 million to fund the initialdrilling. Independent consultant Senergy Limited, has assigned an Expected Monetary Valueof US$78 million to just one of several prospects in the licence. Russian Acquisition Matra Petroleum plc has entered into an agreement to acquire 100% of the Russiancompany 'OOO' Arkhangelovskoe. This company is registered in the Orenburg Oblastand owns 100% of the rights to the Arkhangelovskoe and is the designatedOperator. Exploration License situated some 20-30kms from the city of Orenburg.The city of Orenburg is some 1200kms SE of Moscow. The License covers 158km2 andis in close proximity to existing production. The acquisition is being made from the owners of Kompania Gaz I Neft who havebeen active in Orenburg for several years and produce from an adjacent license.The consideration for the acquisition is 55,000,000 Matra shares. The license is valid until August 2009 and has a requirement to drill 4 wells.The first well will test the Sokolovskaya structure to a depth of approximately3900m. Drilling is expected to commence in June and take approximately 4 months.Technical review of the other prospects on the license is continuing in order toprioritise the forward drilling schedule. Consultants Senergy Ltd (www.senergyltd.com) has completed an independentevaluation of the Sokolovskaya prospect which is one of several on the block. Prospective recoverable resources were estimated by Senergy Limited, for theSokolovskaya prospect, using both deterministic and probabilistic methods andtheir results were as follows:- Million Barrels Prospective Recoverable Resources Low Best High Estimate Estimate Estimate Deterministic 4.1 32.3 114.1 Probabilistic 16.1 32.1 54.7 Senergy's risk assessment concluded that there is an 80% chance of finding acommercial discovery and a 40% chance of finding their best estimate ofprospective recoverable resources of 32 million barrels. Senergy's estimate of the Net Present Value for the best estimate of 32 millionbarrels is US$93 million using a discount rate of 10% and a flat US$50/barreloil price. Their assessment of Expected Monetary Value (EMV - risked valuation) for theSokolovskaya prospect alone is US$78 million. Share Placement Matra has entered into an agreement, subject to shareholder approval, withDelek-International Energy Ltd to issue 135,000,000 new shares in Matra at anissue price of 4.5p/share raising a total of £6.075 million which will be usedto fund the initial drilling in Orenburg. This will give Delek a 29.9% holdingin the expanded share capital of Matra. Delek will also receive 24,000,000options to subscribe for new shares in Matra at an exercise price of 8p/shareand valid until February 15th 2009. Delek-International Energy Ltd is asubsidiary of Delek-Group an Israeli conglomerate with a market capital in theregion of US$2.3 billion. Delek holds interests in upstream oil and gas assetsin Israel, Vietnam, Guinea Bissau and the USA. Delek will be invited to nominate one non-executive Director to the board ofMatra. The agreement with Delek is subject to completion of the acquisition of OOOArkhangelovskoe which is anticipated shortly. The agreement is also subject toMatra shareholder agreement and notice of an EGM to be held on 26th April 2007will shortly be dispatched to shareholders. Peter Hind, Matra's Managing Director said: "This acquisition in Russia complements our position in Hungary and importantlyprovides shareholders with exposure to near term drilling of the Sokolovskayaprospect. It is extremely gratifying to see the value attributed to this assetin Senergy's review. The placement with Delek confirms that this acquisition isboth value adding and highly prospective. Delek's investment in Matra illustrates their confidence in Matra's ability notonly in this exceptional opportunity but also in generating further value addingacquisitions in the future. There are clear benefits in having Delek as a significant shareholder andproviding input to the board. We look forward to working more closely with themin the future. The increase in market capitalisation and additional funding puts Matra in anideal position to take advantage of other nearby opportunities that are underconsideration" The information in that review that relates to technical matters has beencompiled by Senergy Limited and reviewed by Dr Neil Hodgson (BSc, PhD) Matra'sExploration Director a Petroleum Geologist with more than 20 years experienceand who is a Fellow of the Geological Society and a member of the PetroleumExploration Society of Great Britain (PESGB). Estimates of Prospective Resourcesare made in accordance with SPE guidelines. For further information, please contact: Matra Petroleum plc www.matrapetroleum.com Peter Hind, Managing Director +44 (0) 7990 807 855Neil Hodgson, Exploration Director +44 (0) 7973 342 822 Aquila Financial Limited www.aquila-financial.com Peter Reilly +44 (0) 20 7202 2601Ross Bethel +44 (0) 20 7202 2603 Matra's nominated Advisor is RFC Corporate Finance Ltd - Contact: Steve Allen +61894802500 Glossary SPE - Society of Petroleum Engineers Prospective Resources are "those quantities of petroleum which are estimated, ona given date, to be potentially recoverable from undiscovered accumulations." Deterministic estimates refer to 3 individual calculations of resources whereasProbabilistic estimates refer to points on a distribution curve of estimates.Both methods are commonly used by Senergy and other consultants. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MTA.L