Tristan Oil CEO: Obligation to make coupon payment on 10½% notes now held by Kazakh government

By Jennifer Lanning Drey

Portland, Ore., July 26 - Tristan Oil Ltd.'s chief executive officer said the responsibility for making the coupon payment on its 10½% senior secured notes was transferred to the government of Kazakhstan after the Kazakh Ministry of Oil and Gas canceled the subsoil use contracts of operating companies Kazpolmunay and Tolkynneftegaz.

Tristan Oil CEO Anatolie Stati said the company had been preparing to pay the coupon on time, but its rights to do so were taken away in connection with the cancellation of the contracts.

"We have no rights and cannot pay the coupon. The responsibility will be transferred on the government of Kazakhstan. They should answer for this now," Stati said during a company conference call held Monday.

When asked whether he expected the payment to be made on time, Stati said, "We very much hope so that they will pay the coupon."

Tristan Oil previously elected to use the 30-day grace period under the notes indenture regarding the interest payment due on July 1, according to a company news release.

Meanwhile, on Thursday, Tristan Oil announced that the Kazakh Ministry of Oil and Gas canceled the subsoil use contracts of Kazpolmunay and Tolkynneftegaz with respect to the Borankol field and Tolkyn field.

Kazpolmunay and Tolkynneftegaz are limited liability partnerships organized under the laws of Kazakhstan.

According to Tristan Oil, the two operators were told that the Borankol and Tolkyn fields had been transferred into trust management to NC KazMunayGas and that all facilities and field infrastructure were to be temporarily transferred by the companies into KazMunayGas' custody until the final transfer to a new operator.

Tristan Oil said that despite considerable efforts, it has been unable to effectively resolve the issues through the Kazakh legal system.

Arbitration claim

As a result, Tristan Oil has retained international law firm King and Spalding to prepare an international arbitration claim against the Republic of Kazakhstan.

During the call, Stati said questions regarding the specifics of the claim should be directed to King and Spalding. However, he also said Tristan Oil expects to win the case and will pay its debts to noteholders with the damages issued.

"The company is deeply troubled by the latest actions of the Kazakh government and will continue pursuing any and all remedies available to protect its rights and interests in the Kazakhstan and the rights and interests of its noteholders," Stati said.

The CEO also said Tristan Oil will make all of its actions public for its bondholders. In addition, he said the company was willing to set a time and place to meet with its bondholders.

Tristan Oil said it views the cancellation of the subsoil use contracts as the final step in a systematic campaign by Kazakh authorities to illegally expropriate Kazpolmunay's and Tolkynneftegaz's assets and the investments made by their stakeholders in Kazakhstan.

Tristan Oil is a British Virgin Islands oil and gas exploration and production company operating primarily in Kazakhstan.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.