Bahar Energy Limited is developing the oil and gas block, including Bahar and Gum Deniz deposits in the Azerbaijani sector of the Caspian Sea, the statement said.
The source said the Greenfields Petroleum Corporation will become the only shareholder of Bahar Energy Limited, following the deal.
"Greenfields Petroleum Corporation will pay Baghlan Group’s contribution in the company’s capital and assume the obligations to pay off the loan, granted by Bahar Energy Limited for the development of fields,” the source said.
“The transaction amount includes the payment worth $6 million, as well as the repayment of obligations incurred by Baghlan Group towards Bahar Energy Limited, the so-called default liabilities,” the source added.
The source has not specified the total amount of the transaction, but said the Greenfields Petroleum Corporation is assessing the default liabilities at around $57.6 million.
“After completion of the deal, in case of compliance to certain preconditions, Greenfields Petroleum Corporation will become a 100 percent owner of Bahar Energy Limited,” said the source. “At the same time, $6 million will be placed on a special account as a deposit before completion of the deal in order to confirm the company`s liabilities. The deal is expected to be completed within the next three months.”
In order to finance the agreement, the company agreed on a debt restructuring and once again extended the loan agreement on the allocation of funds for the development of the block “Bahar-Gum Deniz”, according to the source.
“The new agreement provides for the allocation of additional $7 million for the deal on acquisition of a stake in Bahar Energy Limited and operational costs, as well as prolongation of the loan agreement until May 16, 2016,” the source said. “After restructuring of the loan is completed, Greenfields Petroleum Corporation intends to extend the loan agreement until December 31, 2017.”
Previously, SOCAR signed a production sharing agreement (PSA) with Bahar Energy Ltd. for exploration, rehabilitation, development and extraction at the Bahar-Gum Deniz block.
The PSA’s second part involves an exploration at the Bahar-2 structure.
Bahar Energy Ltd., according to initial estimates, had to invest $1 billion for implementation of works under the PSA. Bahar field, located 40 km southeast of Baku, the capital of Azerbaijan, has been developed since 1969.
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