If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.
If you have sold or transferred all your shares in Kunlun Energy Company Limited (the ''Company''), you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the transferee.
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.
KUNLUN ENERGY COMPANY LIMITED
(incorporated in Bermuda with limited liability)
昆 侖 能 源 有 限 公 司
(Stock Code: 00135.HK)CONTINUING CONNECTED TRANSACTIONS AND
NOTICE OF SPECIAL GENERAL MEETING
Independent Financial Adviser to
the Independent Board Committee and the Independent Shareholders
First Shanghai Capital Limited
A letter from the Board is set out on pages 7 to 36 of this circular and a letter from the Independent Board Committee, containing its recommendation to the Independent Shareholders, is set out on page 37 of this circular. A letter from the independent financial adviser, First Shanghai Capital Limited, containing its advice to the Independent Board Committee and the Independent Shareholders in respect of the New Master Agreement and the Proposed Annual Caps is set out on pages 38 to 53 of this circular.
A notice of SGM to be held at President's Room, 38th Floor, World Trade Centre, 280 Gloucester Road, Causeway Bay, Hong Kong on 19 December 2017 (Tuesday) at 10:00 a.m., is set out on pages 60 to 62 of this circular. A proxy form for use by the shareholders of the Company at the SGM is enclosed with this circular. Whether or not you intend to attend and vote at the SGM in person, you are requested to complete the proxy form enclosed in accordance with the instructions printed thereon and return it to the principal office of the Company at 39th Floor, 118 Connaught Road West, Hong Kong as soon as practicable but in any event not later than 48 hours before the time for holding the SGM or adjourned meeting (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting in person at the SGM should you so wish.
1 December 2017
Pages
DEFINITIONS 1
LETTER FROM THE BOARD 7
INTRODUCTION 7
NEW MASTER AGREEMENT 10
CONTINUING CONNECTED TRANSACTIONS 11
REASONS FOR, AND BENEFITS, OF THE PROPOSED
CONTINUING CONNECTED TRANSACTIONS 33
INFORMATION ON THE GROUP AND OTHER PARTIES 34
SGM 34
RECOMMENDATION 35
ADDITIONAL INFORMATION 36
LETTER FROM INDEPENDENT BOARD COMMITTEE 37
LETTER FROM FIRST SHANGHAI 38
APPENDIX I - GENERAL INFORMATION 54
NOTICE OF THE SGM 60
In this circular, unless the context otherwise requires, the following terms shall have the meanings set out below:
''associate(s)'' has the meaning ascribed to it under the Listing Rules
''Beckbury'' means Beckbury International Limited, a company incorporated with limited liability in the British Virgin Islands and a wholly-owned subsidiary of the Company
''Board'' means the board of directors of the Company
''CBRC'' means the China Banking Regulatory Commission（中國銀
行業監督管理委員會）
''CNPC'' means 中 國 石 油 天 然 氣 集 團 公 司 (C hina Na tion a l Petroleum Corporation), a state-owned enterprise established under the laws of the PRC
''CNPC Group'' means CNPC and its subsidiaries, but excluding members of the Group
''Company'' means Kunlun Energy Company Limited, a company incorporated with limited liability in Bermuda and the shares of which are listed on the Stock Exchange
''connected person'' has the meaning ascribed to it under the Listing Rules
''Continuing Connected Transactions''
means the continuing connected transactions between the Group and the CNPC Group contemplated under the PSAs, the Master Agreement, and the New Master Agreement (where appropriate) as set out in the paragraph headed ''Continuing Connected Transactions'' of this circular
''controlling shareholder'' has the meaning ascribed to it under the Listing Rules
''Director(s)'' means director(s) of the Company
''Existing Caps'' means the existing maximum aggregate annual values of the Continuing Connected Transactions for each of the three years ending 31 December 2017 as set out in the announcements of the Company dated 7 November 2014 and 28 December 2015 and the circulars of the Company dated 11 November 2014 and 23 January 2016
''Fifth Supplemental Agreement'' means the agreement dated 6 November 2014 entered into
between the Company and CNPC amending certain terms of, and renewing the Master Agreement for the three years ending on 31 December 2017
''First Supplemental Agreement'' means the agreement dated 14 November 2006 entered into
between the Company and CNPC amending certain terms of, and renewing, the Master Agreement for the three years ended on 31 December 2009
''Fourth Supplemental Agreement'' means the agreement dated 14 November 2011 entered into
between the Company and CNPC renewing the terms of the Master Agreement for the three years ended on 31 December 2014
''Group'' means the Company and its subsidiaries
''Hafnium'' means Hafnium Limited, a company incorporated with limited liability in the British Virgin Islands and a wholly- owned subsidiary of the Company
''HK$'' means Hong Kong dollars, the lawful currency of Hong Kong
''Independent Board Committee'' Means the independent committee of the Board, comprising
Mr. Li Kwok Sing Aubrey and Dr. Liu Xiao Feng and Mr. Sun Patrick, being all the independent non-executive Directors of the Company, established for the purpose of, among other things, advising the Independent Shareholders in respect of the entering into of the New Master Agreement and the transactions contemplated thereunder, the Continuing Connected Transactions and the Proposed Annual Caps
''Independent Financial Adviser'' or ''First Shanghai''
means First Shanghai Capital Limited, a licensed corporation licensed to carry out type 6 (advising on corporate finance) regulated activity as defined under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the entering into of the New Master Agreement and the transactions contemplated thereunder, the Continuing Connected Transactions and the Proposed Annual Caps