London-listed Kazakh oil and gas producer KazMunaiGas Exploration Production (RDGZ.KZ) said Thursday it would buy back its common shares and global depository receipts traded on the Kazakhstan and London Stock Exchanges, respectively.
KazMunaiGas Exploration Production, or KMG EP, said in a statement its board believed the current price of shares and GDRs don't reflect its true value.
"The decrease in value of KMG EP shares over recent months has been caused predominantly by external factors, whilst the company's operating and financial performance has been strong," it said.
KMG EP said it has an option under the share buyback program to purchase its shares and GDRs up to a total $350 million. The program will start in the next few weeks and will last up to 12 months.
The shares and GDRs will be bought "at the prevailing market price" at the time of the purchase, KMG EP said.
"The company believes that the current net cash position, combined with strong cash flows generated by operating activity, offers KMG EP substantial financial flexibility in the execution of its strategy of growth through acquisition, exploration and investment in existing oil and gas assets," KMG said, adding it is still pursuing the acquisition of onshore oil and gas assets in Kazakhstan.
KMG EP GDRs have fallen 62.3% to $11.75 on the London Stock Exchange since the beginning of this year amid uncertainty of planned tax changes and volatility in financial markets.