We refer to the Company’s announcements dated 25 August 2022, 31 October 2022, 27 April 2023, 26 June 2023, 22 November 2023, 8 December 2023 and 31 January 2024 in respect of the Statement of Claim filed by the Company’s sub-subsidiary, Emir-Oil LLP (“EO”) to Ministry of Energy of the Republic of Kazakhstan (“MOE”) relating to the approval of the Amendment No. 4 on the deferral of the contractual obligations of Dolinnoe’s oil field for the periods of 2020 and 2021 to the periods of 2022 to 2025.

The Board of Directors of Reach Energy Berhad (“the Company”) would like to update that EO had filed its appeal to the Appellate Division of the City Court of Nur-Sultan on 23 September 2022. The Court of the City of Astana (formerly known as the City Court of Nur-Sultan) on 28 October 2022 had supported the position of the MOE and rejected the claim of EO.

Following that, EO filed a cassation complaint to the Supreme Court of the Republic of Kazakhstan on 25 April 2023 and the Court had on 12 June 2023 at the first preliminarily stage denied EO motion. Accordingly, EO has the right to petition the Prosecutor General to issue a protest the decision of the Supreme Court of the Republic of Kazakhstan.

On 14 November 2023, the MOE filed a claim in the Specialized Inter-District Economic Court of Astana for the compulsory recovery of debt from EO due to non-performance of financial obligations under the Dolinnoe’s contract for the period from 2020 to 2021, with a claim amount of approximately KZT2.6 billion (i.e. RM27.4 million).

The Specialised Inter-District Economic Court of Astana accepted the MOE’s claim. EO has submitted the objections on 5 December 2023 to the claim along with supporting documents. The Specialised Inter-District Economic Court of Astana completed the consideration of the MOE’s claim and the full text of the reasoned decision of the Court was made available to EO on 29 January 2024.

According to the Court's decision, the MOE’s claim were partially satisfied. A reduced fine in the amount of KZT910.3 million (i.e. RM9.6 million) and a state duty of KZT27.3 million (i.e. RM0.3 million) were imposed on EO.

The MOE filed an appeal against the decision of the Specialised Inter-District Economic Court of Astana. The appeal has been accepted by the Court. Currently, we are awaiting for the transfer of the case to the second instance court for the consideration of the Ministry's appeal by the judicial panel of the Court of the City of Astana.

Hence, the Company is seeking necessary legal advice to resolve and /or to defend the legal suit.

As at to-date, the Group has recognised a provision the claim amount of approximately KZT2.6 billion (i.e. RM27.4 million).

The Company will make the necessary announcements to Bursa Malaysia Securities Berhad as and when there are further developments on the above case.

This announcement is dated 15 February 2024.