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Roxi Petroleum set for US$28mln boost from possible Galaz sale

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Roxi Petroleum (LON:RXP) has revealed it could be set for a US$28mln cash boost from a proposed sale of the Galaz Contract Area in Kazakhstan.

Chinese buyer Xinjiang Zhundong Petroleum Technology, which is listed on the Shenzhen Stock Exchange, has launched a US$100mln bid for the project which is 34.22% owned by Roxi.

Roxi confirmed, in a stock market statement, it has entered into a non-binding agreement with the Chinese suitor which grants exclusivity over a deal until January 31.

The company also clarified that Xinjiang Zhundong proposes to buy Galaz & Co LLP, 34.22% owned by Roxi, for US$50.4mln and the buyer would also assume shareholder loans worth US$49.6mln - of which US$11.3mln is owed to Roxi.

Such a cash injection would be sufficient to fund at least four deep wells at the potentially high impact BNG project.

"For some time we have made it clear that while we are very pleased with our investment at Galaz we view the opportunities at our flagship BNG asset to be greater,” said chairman Clive Carver.

“The proposed sale our interest in Galaz on the terms disclosed would fund the bulk of what we have planned this year at BNG."

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