Exploration Production KazMunayGas JSC purchases 50%-ge stake in JV Kazgermunay LLP from NC KazMunayGas JSC

/KASE, March 5, 07/ - Exploration Production KazMunayGas JSC (Astana), shares of which are traded in Kazakhstan stock exchange's (KASE) category "A" official list had spread today the press-release in which the following is informed: Quotation begin KazMunaiGas EP Implements Acquisition Strategy. KMG EP will acquire 50% stake in JV Kazgermunai LLP from NC KazMunaiGas Astana, 5 March 2007. KazMunaiGas Exploration Production ("KMG EP" or the "Company") announced today its agreement to acquire a 50% stake in JV Kazgermunai LLP ("KGM") from National Company KazMunaiGas ("NC KMG") for a cash consideration of 133.3 billion Tenge (approximately US$1.07 bn). This transaction is the first significant step in the company's implementation of its growth strategy described at the time of the Initial Public Offering in September 2006. Kazgermunai is an attractive addition to the Company's portfolio with its young assets, low production costs and a stable tax regime. The deal will further diversify the KMG EP operations and expand the Company's presence to the new oil and gas region in Kazakhstan. The Chief Executive Officer of KMG EP, Mr. Askar Balzhanov, said "We are excited to make our first significant acquisition, which will benefit our shareholders by providing immediate growth in reserves and production and further enhancing KMG EP's position as a leading Kazakh oil and gas producer". The independent non-executive directors unanimously approved the acquisition, which is subject to satisfaction of a number of conditions including the approval of a majority of independent shareholders and GDR holders at an Extraordinary General Meeting scheduled for 12 April 2007 in Astana. The Board of Directors of KMG EP has received an opinion from Credit Suisse that the consideration to be paid by the Company in the acquisition of Kazgermunai is fair to KMG EP from a financial point of view. If approved, the transaction is expected to close within a few weeks of the EGM. The purchase will be financed from the existing financial resources of KMG EP and will be accounted for as an equity investment. KMG EP is the 3rd largest Kazakh oil and gas producing company with 205.9 mmt (1.5 bn bbl) of proved and probable reserves at the end of 2005 and over 9.5mmt/year (190 mbopd ) of crude production in 2006. The acquisition of 50% of Kazgermunai would make KMG EP the second largest Kazakh oil and gas producer. The Company's shares are listed on Kazakhstan Stock Exchange and the GDRs are listed in London. The company raised approximately US$2 billion in its successful IPO in September of 2006 National Company KMG represents the state's interests in the Kazakh oil and gas industry and is involved, through its subsidiaries, in various aspects of the oil and gas business from exploration and production to transportation, refining, marketing and services. NC KMG owns approximately 61% of the ordinary shares of KMG EP Kazgermunai is the 8th largest Kazakh oil and gas producing company with nearly 3mmt/year (60 mbopd) of crude oil production in 2006 and 40.7 mmt (310 mmbbl) of proved and probable reserves at the end of September 2006. PetroKazakhstan Kumkol Resources is the other shareholder in KGM. Additional information: The Management of the company will conduct the conference-call for investors on the announced deal at 20:00 (Astana time) (14:00 in London) on Monday March 5, 2007. Instructions of access to conference-call and files of presentation will be published on Company's Internet-site at www.kmgep.kz Contact information: KMG EP, Public relations (+7 3172 977908, +7 3172 977924) Lyazzat Kokkozova e-mail: pr@kmgep.kz KMG EP, Investor relations (+7 3172 975433) Alexandr Gladyshev e-mail: ir@kmgep.kz WMC Communications Ltd (+44 207 930 9030) Elena Dobson e-mail: elena.dobson@wmccommunications.com Quotation end [2007-03-05]