Roxi Petroleum to merge Kazakh assets with Braverstock

Oil and gas explorer Roxi Petroleum will take greater control of its Kazakhstan project after striking a deal with Swiss miner Braverstock to merge their assets in Eragon Petroleum for about £67.88m, subject to shareholder approval.

The companies have already gained regulatory consent to merge Roxi and Baverstock's interests in Eragon, which holds a 99% stake in the company's principal asset, BNG, a subsoil contract in Kazakhstan.

The proposed merger will increase Roxi’s shareholding in Eragon to 100% from 59%, which would increase Roxi's interest in the BNG contract area to 99% from 58.41%.

Roxi has also agreed to allot 651.43m new shares to Baverstock and a further 80.8m shares will be issued to Kuat Oraziman, a Baverstock shareholder, subject to the conversion of a $10m loan to Dutch oil and gas company Vertom International by 30 April 2018. Together these new shares will represent 43.86% of the Roxi’s share capital.

Chairman Clive Carver said: "The proposed merger has been longed planned and once completed will bring 99% of our principal asset BNG under our direct control removing any funding constraints associated with maintaining the current structure.

“Additionally the capitalisation of some $10m of debt would not only make the group essentially debt free but also demonstrates the continued belief and commitment of the companies leading investors to it ultimate success.”

Shares in Roxi Petroleum were up 4.87% to 9.96p at 0911 GMT.