Mol purchases BaiTex from VE-NEFT, RusOil to expand in Russia - extended

Baitex owns the license to subsoil under the Baituganskoye oil producing field in the Volga-Ural region, one of Russia's main oil producing provinces, Mol said in a stock exchange statement today. The purchase price was not disclosed, yet „reflects the fair market value,” the Hungarian company said. Mol is shifting its focus to exploration and production after buying refineries and filling stations in eastern Europe over the past five years. It pumps Russian oil at the Zapadno-Malobalyik field in the Khanty-Mansiysk region through a venture with OAO NK Russneft, and in October bought the stake it didn't own in its joint venture with Russia's North-West Oil Group.

„The purchase of BaiTex LLC is an excellent fit with Mol's strategy, which is focused on acquisition of further exploration and production projects in Russia,” Mol said in the statement. BaiTex had 66.7 million barrels of proven and probable reserves as of December 31 last year. The current level of production is 1,800 barrel a day, which Mol plans to boost to 14,000 barrels. It will also spend between $200 million and $250 million on development, it said. „We see the news as slightly positive as we doubt the field was acquired below the targeted reserve replacement ratio of Mol,” Barbara Jánosi, an analyst at KBC Securities wrote in a note to clients today. Shares in Mol lost 0.1% to 21,830 forint at 10:16 a.m. in Budapest. They have gained 7.2% this year. (Bloomberg)