Tethys Petroleum (TPL) has agreed to sell a 50 per cent interest in its Kazakhstan assets to a Chinese private equity fund, Sinohan Oil and Gas Investment, for $75m (£47m) plus an additional $30m in potential exploration bonuses.
While the transaction values the asset at less than what analysts from FirstEnergy carried in their valuation model, it reduces Tethys’ exposure to drilling costs there and will help accelerate the ongoing exploration program. The new $75m implied value of the remaining Kazakh interest, combined with the expected value of net cash at year-end 2013 - a whopping $114m - is just shy of Tethys' current market capitalisation at $202m. That means investors have upcoming exploration in Tajikistan, Kazakhstan, Uzbekistan and Georgia almost for free.
