Max Petroleum announces that Sberbank has unconditionally granted a six month standstill on all principal and interest payments due under the Company’s c.US$80 million loan through to 14 December 2015. In addition, the Company has accrued US$3.8 million of interest as of 30 June 2015. Interest will continue to accrue during the standstill period.
The Company continues in operation under severe financial stress, currently producing in excess of 3,500 barrels of oil per day, including from the Sagiz West field after regulatory permission was granted in June to resume production from both Sagiz West and East Kyzylzhar I fields under Trial Production Phase. East Kyzylzhar I field commissioning and return to production of several hundred additional barrels per day is also expected in the next week.
Max Petroleum has received notification from the Ministry of Finance of the Republic of Kazakhstan alleging that, under tax legislation, payments of over US$20 million are due for Soviet-era historical data costs incurred in the Company’s Blocks A&E licence area.
The Company disagrees with this interpretation and application of the tax legislation and considers that to date it has met its obligations to reimburse historical costs as they fall due.
The Company intends to put its case to the tax authorities.
Discussions with AGR Energy continue to secure financing to ensure the ongoing viability of the business and with Sberbank for a longer term debt restructuring. The Directors of Max Petroleum currently continue to believe that there remains a reasonable prospect that such discussions could result in a sufficient refinancing of the Company and, on that basis, have not yet put the Company into administration.
