UPDATE: MOL Buys 10% Stake In Pearl Petroleum With Tsy Shrs

http://online.wsj.com/article/BT-CO-...

BUDAPEST (Dow Jones)--Hungarian oil and gas company MOL Nyrt. (MOL.BU) said Sunday that it acquired a 10% stake in Pearl Petroleum Co. Ltd., the owner of two large gas field development projects in Kurdish Iraq, to provide supplies to the planned Nabucco Pipeline.

Fellow central European oil and gas company OMV AG (OMV.VI) of Austria also acquired a 10% stake in Pearl, OMV said separately Sunday.

Based on its stake in Pearl, "MOL will be enabled to supply the Nabucco pipeline, or one of its alternatives, with significant amount of natural gas," MOL said in a statement.

"MOL believes that this deal will prove to be an important step toward the realization of this European gas diversification project [Nabucco]," the company said.

MOL bought the Pearl stake from Crescent Petroleum (CJPL.KA) and Dana Gas PJSC.

In exchange for the 10% Pearl stake, MOL paid 6.271 million "A" series MOL shares, representing 6% of its registered equity.

MOL has recently firmed its takeover defenses in the company's statutes after Russia's fourth-largest oil company, Surgutneftegaz (SNGS.RS), purchased a 21.2% stake in the Hungarian firm earlier this year.

MOL paid for the Pearl stake with some of the treasury shares parked at Hungary's largest retail bank OTP Nyrt. (OTP.BU) and Hungarian state-owned investment bank MFB Zrt. MOL said in a separate statement that the shares resulted from the termination May 14 of lending agreements for 4.666 million treasury shares with MFB and 1.606 million treasury shares with OTP.

As a result of the Pearl transaction, Crescent Petroleum and Dana Gas will each hold a 3% stake in MOL, it added.

Pearl holds all of the legal rights for the Khor Mor and Chemchemal gas-condensate fields in the Kurdistan Region of Iraq.

The project partners will now push forward with substantial new investments in the Kurdistan region of Iraq, with planned spending of around $8 billion to further develop the assets, provide gas for Iraqi power generation capacity and exports to neighboring countries, including Turkey and beyond into Europe.

The companies' gas project in the Kurdish region of Iraq is producing 90 million standard cubic feet per day of gas plus associated condensate and liquefied petroleum gas. The partners estimate that the projects have the potential to produce over 3 billion standard cubic feet of gas per day including substantial volumes of associated liquids by 2014.

This is more than 10 times Hungary's current daily gas output and equivalent to Nabucco's planned daily transportation capacity, MOL said.

Company Web site: www.mol.hu

-By Margit Feher, Dow Jones Newswires; +361-267-0622; margit.feher@dowjones.com