MOL has acquired 100% stake in BaiTex LLC

MOL Hungarian Oil and Gas Public Limited Company has won the tender for the acquisition of 100% of BaiTex LLC in Russia from Texas-based VF-NEFT Development LLC and RusOil LLC. After the receipt of the approval of the Federal Antimonopoly Service, the transaction was closed on December 28, 2006 when MOL gained 100% ownership of BaiTex LLC. Purchase price shall remain confidential, however it reflects the fair market value of Russian oil producing assets with similar characteristics, maturity and development potential.

BaiTex LLC owns the License to the subsoil under the Baituganskoye oil producing field in the Volga-Ural region, one of Russia’s main oil producing provinces. The infrastructural provision of the area is good, the field has direct pipeline connection to the main Transneft pipeline system. The asset had 66.7 million barrels of proven and probable reserves in accordance to the reserve audit provided by DeGolyer and MacNaughton as of December 31, 2005. The present level of production is 1 800 bbl/day of crude with 26 API degree and low sulphur content. Peak production and investment need are subject to geological and technical uncertainties, however, according to the field development plans of MOL, daily production can be increased to 14 thousand barrel, while USD 200-250 million will be spent on field development.

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.