(Yicai) Sept. 26 -- Shares in Zhongman Petroleum and Natural Gas Group advanced today after the private Chinese oil and gas development company said it will invest USD79.3 million to take over Rising Energy International Middle East FZCO, which fully owns the operator of the Kengir Block oil and gas project in Kazakhstan, to expand its oil and gas reserves and boost production.

Zhongman Petroleum’s share price [SHA:603619] closed up 2.3 percent today at CNY19.33 (USD2.71). Earlier in the day it jumped as much as 4.2 percent to hit CNY19.68. By contrast, the benchmark Shanghai Composite Index ended the day down 0.65 percent.

Zhongman Petroleum will purchase a 49 percent stake in Rising Energy from Xinhuaxia International Energy, the Shanghai-based firm said yesterday. It already owns the other 51 percent.

The deal qualifies as a related-party transaction as Zhongman Petroleum's controlling shareholder Shanghai Zhongman Investment Holding and its actual controller Li Chundi together hold 58.5 percent of Xinhuaxia Energy, the company said.

Xinhuaxia Energy first acquired the exploitation rights to the Kengir Block in 2018. Starting from June 2019, Zhongman Petroleum gradually hiked its stake in Rising Energy, raising it to 51 percent in September 2022, and officially took over operations of the Kengir Block in February 2023.

Since then, production has climbed sharply. Oil and gas output surged more than two-and-a-half fold in 2024 from 2023 to 301,500 tons of oil equivalent. And in the first six months it reached 210,900 tons, it said.

The Kengir Block is located in an area rich in oil and natural gas resources, where there are about 25 medium-sized and large oil and gas fields, including the Uzen Oilfield, which is the largest oilfield in Kazakhstan. Third-party estimates cited in the announcement put the block’s combined proven and probable reserves at 64.4 million tons of crude oil and 21.8 billion cubic meters of natural gas.

Zhongman Petroleum started out as a drilling services provider, but later shifted focus to resource exploration and development. The firm operates oil and gas fields in China and Kazakhstan, and last year obtained the rights to two blocks in Iraq. In July, Zhongman Petroleum said it would establish a joint venture with Sonatrach, Algeria's national oil company, to explore and develop the Zerafa II natural gas block in Algeria.

Editor: Kim Taylor