We refer to the Company’s announcement dated 25 August 2022 and 31 October 2022, 27 April 2023 and 26 June 2023 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 period of 2020 and 2021 to period 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 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 KZT2,632,000,000 (RM24,761,000).

The Specialised Inter-District Economic Court of Astana accepted the MOE’s claim. EO will submit objections to the claim along with supporting documents.

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

In the event that the suit is not in favour of EO, the financial and operation impact to the EO shall be limited to fulfil the contractual obligations and pay a fine of KZT2,632,000,000 (RM24,761,000). As at 31 December 2022, the Group has recognised a provision for this fine amount.

The Company will make the necessary announcements to Bursa Malaysia Securities Berhad as and when there are further developments in relation thereof and/or upon receipt of any further directions by the Court.

This announcement is dated 22 November 2023.