Roxi to farm out interest in BNG Contract Area, shares jump

Jan 19 (Reuters) - Kazakhstan-focused explorer Roxi Petroleum Plc (RXP.L) said it agreed to farm out up to 35 percent of an exploration asset to Canamens Energy BV, a private-equity-funded upstream oil and gas company, sending its shares up 20 percent.

Roxi holds a 58.4 percent indirect stake in the exploration block, BNG Contract Area, which is located about 40 kilometres from the Tengiz oilfield in the Pre-Caspian basin of West Kazakhstan.

Canamens would provide $5 million in interest-bearing advance to the company that will have to be repaid on completion of the first stage of the agreement or on June 30, Roxi said in a statement.

The company said Canamens has the option to fund up to $27 million for the project in 2009, earning a further 20 percent interest in BNG.

Roxi, which successfully completed the five-well appraisal drilling programme on the NW Konus field in Central Kazakhstan, also said it was in a position to continue monetising its projects.

The company also said it continued to hold talks with a number of parties to provide strategic funding over the longer term.

Shares of Roxi were up 20 percent at 3.0 pence at 0834 GMT on the London Stock Exchange. (Reporting by Tresa Sherin Morera in Bangalore; Editing by Anil D'Silva)