Business & Strategy

Business

On April 27, 2004, CEL raised US$9,750,000 through the issue and sale of 23,045,454 common shares by way of a private placement.  Effective June 25, 2004, CEL acquired a 50% interest in Aral and a temporary 100% beneficial interest in the then currently producing well of Aral from Azden Management Limited (“Azden”), in exchange for 16,545,454 common shares of CEL valued at $9,430,909 and payment of US$9.0 million in cash.

On September 20, 2004, prior to completion of the merger, CEL completed a private placement of 7,142,000 common shares at a price of $1.90 per share.  On September 21, 2004, concurrently with the closing of the merger, the common shares of the Company were admitted to trading on the Alterative Investment Market (AIM) of the London Stock Exchange (and continue to be listed on the Toronto Stock Exchange) and the Company completed a private placement of 20,218,000 common shares at a price of 0.82 Pounds Sterling per share.

Collectively, the net proceeds raised by the Company and CEL in September of 2004 permit CEL to fund the obligations of Aral relating to a minimum work program pursuant to an exploration contract dated December 29, 2002 that Aral entered into with the Ministry of Energy and Mineral Resources (Republic of Kazakhstan – “ROK”).  Under the terms of the work program, Aral has agreed to spend a minimum of US$20.8 million during the initial three year term of the exploration contract. The expenditures include such things as processing and reinterpretation of geological and geophysical data of prior years, two dimensional and three dimensional seismic shoots and surveys, drilling exploration wells, well reactivations and well surveys and testing. 

Strategy

The Company intends to focus on the exploration and development of the North Block using the latest western techniques to prove up the maximum amount of reserves from the minimum number of wells. The Company intends to crystallise shareholder value either through selected developments or through a targeted program of disposals, at the appropriate stage of development of its assets, in the North Block.