West Siberian Resources Ltd entered into a definitive agreement to acquire 100% of the shares of the oil company operating in the Volga-Ural region of Russia. The acquisition target's main assets include proven and probable oil reserves of 51 million barrels and estimated possible reserves of 83 million barrels, under Russian classification. Average daily oil production amounted to approximately 5,000 barrels in the third quarter. The purchase price amounts to US$ 140 million out of which West Siberian has agreed to pay half in cash and half in newly issued shares.
The transaction is planned to be completed in the beginning of 2006.
The company to be acquired owns exploration and production licenses covering several oil fields located in the Volga-Ural region of central Russia. Proven and probable oil reserves (C1+C2) are estimated at 50.75 million barrels and possible reserves (C3) are estimated at 82.9 million barrels. Oil production from the fields amounted to approximately 5,000 barrels per day from 28 wells in the third quarter 2005.
The purchase price for 100% of the shares in the company to be acquired will be US$ 140 million on a debt free basis. The purchase price shall be paid by US$ 70 million in cash and US$ 70 million in West Siberian shares valued at SEK 4,74 per share. West Siberian Resources has agreed to issue 116 500 000 shares, representing 13%, to current shareholders of the acquisition target.
West Siberian Resources Ltd. is an independent oil company that produces oil, develops oil fields, and conducts oil exploration in Russia. WSR's main assets are the Middle Nyurola, Kluchevskoye, Puglalymskoye, and Khvoinoye oil fields located in the Tomsk region of Western Siberia. The fields are operated by WSR's fully owned subsidiary VTK. Total reserves in these fields in proven plus probable categories amount to 98 million barrels.
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