The deal is quite complex, and requires a great deal of concentration to understand completely. Here are a few highlights insofar as I can tell. It is recommended that any reader also consults the actual RNS issued by the company to check that I've not made any significant errors in this report of it.
- Overall, Roxi's interest in Galaz will fall from 50.15% to 34.22%
- In return, Galaz re-pays a loan from Roxi to Galaz of some $8.4m
- Galaz also loans Roxi of some $8.7m to be re-paid out of future production
- Roxi uses these proceeds to re-pay its convertible loan from Altius Energy (previously known as Arawak Energy), thus avoiding the dilutive effect of conversion. Some of the proceeds are also used to purchase a 13% stake in Galaz from the local partners.
- LGI provide a loan of up to $26m to Galaz some of which will be used to repay the the bridging loan from Kuat Oraziman of $3m announced on 31 March and some to re-pay $5.5m to KazRosMunai. The rest of the money will be used to finance the working capital needs of Galaz and fund further development of the project.
Overall it seems that Galaz is now well-funded, with a credible international partner and Roxi has funds to finance work on other assets as well as participate in the upside on Galaz. Maybe some of these funds will be used on Ravninnoe or to purchase a further stake there.
Unfortunately, we did not learn any more about the results of the NK22 well, which seems like a new discovery on the block. Hopefully, we will hear news on that soon, together with the start of production on NW Konys.
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