In a statement, Sumatec said the framework agreement gave Sumatec access to all data and information regarding parties and assets under the proposed acquisition for technical, legal and financial due diligence purposes.
Subject to a satisfactory results from due diligence studies, a sale and purchase agreement was expected to be executed within six months, and would be satisfied in cash and shares, said Sumatec.
Sumatec was the most heavily traded stock yesterday. Its shares were up 6.5 sen to 37.5 sen on volume of 357.16 million shares.
Incorporated in Kazakhstan, independent upstream oil and gas company Borneo Energy is a 100% beneficiary of the participating interest in Buzachi Neft LLP.
Sumatec said that Buzachi currently had two 25-year subsoil use contracts, valid till November 2026, for the exploration and production of oil and gas in Karaturun Vostochnyi and Karaturun Morskoi fields (Buzachi fields).
The Buzachi fields, which are in shallow waters (one to two metres deep), are located approximately 277km northeast of Aktau city in the northern part of Mangistau region, Kazakhstan.
Sumatec chief executive officer Chris Dalton said the Buzachi fields presented a very attractive proposition to Sumatec.
“The 2P reserves reported to be 68 million barrels of oil are sizeable and they fit in nicely within our new asset selection and acquisition criteria. About US$80mil (RM256mil) has been invested over the years by Buzachi to develop the fields.
“The fields, which started production in 2007, are currently producing between 400 and 600 barrels of oil per day, which means Sumatec can easily ramp up production as soon as it completes the proposed acquisition. Oil transportation is convenient as the fields are just 180km away from the main Uzen-Atyrau-Samara oil pipeline,” he said.
There are 26 wells in the Buzachi fields, five which are in production.
On July 10, Ahmad Johari Abdul Razak, brother of prime minister Datuk Seri Najib Tun Razak, was appointed as independent non-executive director for Sumatec. He has a 1.92% direct interest in the issued and paid-up share capital of the company as at June 30.