RusPetro Gains Most in 11 Months on Bond Plan, Gas Unit Fix

RusPetro Plc, a producer of oil in Siberia, climbed the most in 11 months in London trading after saying it will strengthen its finances and start up an upgraded processing unit next month following last year’s missed targets.

The shares rose as much as 17 percent, the biggest advance since Feb. 29, 2012. RusPetro plans to sell as much as $350 million in bonds, according to a person familiar with the sale who declined to be identified. Standard & Poor’s assigned the offering a B- rating.

RusPetro, developing deposits in Siberia, slumped by as much as 44 percent after saying on Jan. 4 it missed a year-end output target of 10,400 barrels a day because of a lack of capacity to process higher-than-expected condensate volumes.

The oil producer said today the notes will repay Sberbank loans and fund field development. The Russian state bank will provide a $50 million credit line.

RusPetro also plans to convert a $62.8 million loan from investor Limolines Transport Ltd. into shares at the oil producer’s initial public offering price of 134 pence apiece, subject to the outcome of a shareholder meeting scheduled for Feb. 18.

RusPetro’s debts to Sberbank totaled $289 million as of June 30, the most recent presentation on its website showed.

A heat-exchange system to increase condensate processing is expected to start next month, after which total production will rise to 9,000 barrels a day, the company said today.

“Don’t get too excited just yet,” said Alexander Burgansky, an oil and gas analyst at Otkritie Capital. The company’s reduced exit targets for 2013 and 2014 seem unrelated to delays in infrastructure work, he said.

Oil and condensate output will rise to 13,000 barrels a day by December and average 10,000 barrels in 2013. RusPetro sees an exit rate of 20,000 barrels in 2014 and 31,000 barrels in 2015.

The stock was up 8.8 percent at 51 pence as of 11:22 p.m. in London.

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