KUALA LUMPUR (March 7): Reach Energy Bhd’s proposal to acquire an oilfield in Kazakhstan did not appear to have a ripple effect on its share price when trading resumed this afternoon.

At 2:50pm, the special purpose acquisition company was trading at 66.5 sen for a gain of half sen or 0.76%, with 1.28 million units exchanging hands.
 
In a filing with the bourse over the weekend, Reach Energy said it will acquire 60% of Kazakhstan's Emir-Oil Fields for US$154.9 million (RM638.2 million). Emir will be Reach Energy's first hydrocarbon asset.

This will be carried out by buying a 60% stake in Netherlands-based Palaeontol BV, which owns 100% of Emir.

Palaeontol BV is wholly-owned by Palaeontol Cooperatief UA (Palaeontol COOP), which in turn is a wholly-owned subsidiary of Hong Kong-listed MIE Holdings Corp (MIEH).

"The proposed acquisition is pivotal, as it will be the first hydrocarbon asset to be owned by Reach Energy.

"Since the producing fields within the Emir-Oil Fields are already in production and with established infrastructure of gas pipeline, gas processing plant, oil processing, oil storage and transportation facilities in place, the proposed acquisition is expected to immediately contribute positively to the revenue of Reach Energy," the filing read.

The deal also sees Reach Energy assuming control of 60% of Palaeontol BV's outstanding shareholder loan. The firm said the outstanding loan stood at US$288.5 million as at Sept 30, 2015.

Reach Energy said it planned to use its initial public offering proceeds to finance the Palaeontol BV stake acquistion. The company said it also intends to issue new shares to raise money to finance the purchase.