CALGARY, Feb. 1, 2016 /CNW/ - Petromanas Energy Inc.
("Petromanas" or the "Company") (TSXV: PMI) today announced that it
has entered into a Sale and Purchase Agreement (the "Agreement")
with Shell Upstream Albania B.V. ("Shell"), a wholly-owned
subsidiary of Royal Dutch Shell plc,
pursuant to which Shell has agreed to acquire all of Petromanas'
Albanian assets for aggregate gross proceeds of US$45 million (subject to closing adjustments)
(the "Proposed Transaction"). The Proposed Transaction is expected
to close on or about March 15, 2016 and is subject to
customary closing conditions including applicable regulatory
approvals, as well as Petromanas shareholder approval.
The Proposed Transaction
Petromanas Albania GmbH ("PAG"), a wholly-owned subsidiary of
the Company, and Shell are parties to a production sharing contract
in onshore Albania (the "Block 2-3
PSC") and are parties to a joint operating agreement for the Block
2-3 PSC dated February 9, 2012 (the
"JOA"). On August 5, 2015, PAG
and Shell were awarded the right to negotiate a production sharing
contract for Block 4 onshore in Albania (the "Block 4 Right"). The
Company and Shell currently hold, respectively, a 25% and 75%
participating interest in the Block 2-3 PSC, the JOA and the Block
4 Right. Under the terms of the Agreement, the Company will
dispose of its 25% participating interest in the Block 2-3 PSC
(including Operatorship), the JOA and the Block 4 Right to
Shell. US$5 million of the
gross proceeds from the Proposed Transaction (the "Escrow Funds")
will be held in escrow and not released to Petromanas until the
expiration of the indemnity period under the Agreement, being six
months following the closing date of the Proposed
Transaction.
The Company believes that the Proposed Transaction will provide
significant benefits as it is intended to allow the Company to
return capital to shareholders, wind down the Company's Albanian
operations in an orderly manner and provide sufficient capital for
the Company to reorganize itself, including making strategic
decisions on its assets in France. The board of directors
(the "Board") and management of the Company believe that the
Proposed Transaction is in the best interests of the
Company.
Return of Capital
Following closing of the Proposed Transaction, determination of
post-closing adjustments and subject to shareholder and regulatory
approval, Petromanas intends to make a special distribution to
shareholders (the "Distribution"). The Distribution is
intended to be a return of capital and will be funded primarily
from the net proceeds of the Proposed Transaction but will also
include approximately US$3 million of
working capital. Petromanas anticipates that an aggregate of
approximately US$43 million will be available for distribution
to shareholders following closing of the Proposed Transaction,
which, subject to currency exchange fluctuations, would result in a
distribution to Petromanas shareholders of approximately
CAD$0.08 to CAD$0.09 per share. The Company
anticipates fixing a record date in respect of the Distribution
once final closing adjustments have been determined.
Shareholder Meeting
A special meeting (the "Meeting") of the shareholders of common
shares of the Company is expected to be held in Calgary on or about March 14, 2016. The Proposed Transaction
and the Distribution will require the approval of the shareholders
of Petromanas by way of special resolution of two-thirds of the
shareholders present in person or represented by proxy at the
Meeting.
The Board has carefully reviewed and considered the terms and
conditions of the Agreement and, after consultation with its
financial and legal advisors, has unanimously determined that the
Proposed Transaction and the Distribution are in the best interests
of the Company. Accordingly, the Board unanimously recommends that
shareholders vote in favour of the resolutions to approve the
Proposed Transaction and the Distribution.
Strategic Process
The Proposed Transaction is expected to conclude the Company's
previously announced strategic process. In October 2014, and based on the costs associated
with drilling the Shpirag-2 and Molisht-1 wells, management entered
into a strategic process to identify and review all options to
support the financial requirements of a longer-term appraisal and
development of Blocks 2-3. The Company retained Peters & Co.
Limited ("Peters & Co.") to act as its financial advisor in
connection with such review process. The Board has received
an opinion from Peters & Co. that the consideration to be
received by the Company under the Agreement is fair from a
financial perspective to Petromanas. Norton Rose Fulbright Canada
LLP and Fasken Martineau DuMoulin LLP acted as legal counsel to
Petromanas.
Update on Assets in France
and Australia
Petromanas has also previously announced marketing initiatives
to identify opportunities to further develop its assets in both
France and Australia. The Company believes in the value
of its French assets and intends to continue supporting the
marketing initiative going forward. The Company intends to
allocate sufficient capital from the net proceeds of the Proposed
Transaction, including retention of the Escrow Funds, to support
its activities in France and for
general corporate purposes. Based on current market
conditions, reduced interest from potential partners, and the
higher risk profile of its Australian assets, Petromanas has
elected to terminate the process for its Australian assets and has
submitted a letter to the Western Australian Department of Mines
and Petroleum to relinquish its exploration licenses (EP 464 and EP
486) in the Canning Basin.
About Petromanas Energy Inc.
Petromanas Energy Inc. is an international oil and gas company
focused on the exploration and development of its assets in
Albania. Petromanas, through its
wholly-owned subsidiary, holds a Production Sharing Contract
("PSC") with the Albanian government. Under the terms of the
PSC, Petromanas has a 25% working interest in Blocks 2-3 that
comprises approximately 638,0000 gross acres across Albania's Berati thrust belt. Petromanas also
holds exploration assets in France
and Australia.
This press release contains certain "forward-looking
information" or "forward-looking statements" (collectively referred
to herein as "forward-looking statements") within the meaning of
applicable securities laws. Such forward-looking statements
include, without limitation, the expectations, estimates and
projections of management of Petromanas as of the date of this news
release, unless otherwise stated. The use of any of the words
"expect", "anticipate", "continue", "estimate", "objective",
"ongoing", "may", "will", "project", "should", "believe", "plans",
"intends" and similar expressions are intended to identify
forward-looking information. More particularly and without
limitation, this press release contains forward-looking information
concerning the future performance of the Company, including but not
limited to completion of the Proposed Transaction, the amount of
the Distribution, payment of the Distribution, the anticipated
benefits to the Company and its shareholders of the same, the
amount of any post-closing adjustments and the release of the
Escrow Funds. In respect of the forward-looking information
concerning the future performance of the Company, Petromanas has
provided such in reliance on certain assumptions that it believes
are reasonable on the date the statements were made, including
assumptions as to the value of the Company's Albanian assets, the
amount of the net proceeds from the Proposed Transaction, the
advantages of the Distribution by way of return of capital,
estimated exchange rate fluctuations, the Company's ability to meet
its capital and operational commitments, the ability of Petromanas
to receive, in a timely manner, applicable regulatory and
governmental approvals; and expectations and assumptions
concerning, among other things: commodity prices and interest and
foreign exchange rates; capital efficiencies and cost-savings;
applicable tax laws; the sufficiency of budgeted capital
expenditures in carrying out planned activities; anticipated
post-closing adjustments; and the availability and cost of labour
and services. No assurances can be given as to future
results, levels of activity and achievements and such statements
are not guarantees of future performance. Accordingly, readers
should not place undue reliance on the forward-looking information
contained in this press release.
Since forward-looking information addresses future events and
conditions, by its very nature it involves inherent risks and
uncertainties. Actual results could differ materially from those
currently anticipated due to a number of factors and risks. These
include, but are not limited to the risks associated with the
industries in which Petromanas operates in general such as
operational and exploration risks; the variability of closing
adjustments; delays or changes in plans with respect to growth
projects or capital expenditures; delays in obtaining or the
failure to obtain governmental approvals, permits or financing or
political risks in the completion of development or construction
activities; access to drilling rigs, completion equipment, seismic
equipment and operational personnel; costs and expenses; political
risks; risks of litigation; title disputes; health, safety and
environmental risks; commodity price, interest rate and exchange
rate fluctuations; environmental risks; competition; ability to
access sufficient capital from internal and external sources; and
changes in legislation, including but not limited to tax laws and
environmental regulations. There is a specific risk that the
Company may be unable to complete the Proposed Transaction and the
Distribution in the manner described in this press release or at
all. If the Company is unable to complete the Proposed Transaction
there could be a material adverse impact on the Company and on the
value of the Company's securities. There is a risk that the
Company's shareholders will not approve the special resolutions at
the special meeting of shareholders or that the Proposed
Transaction and the Distribution will not be approved by the
applicable regulatory authorities. Should the special
resolutions not be approved by the Company's shareholders, the
Agreement will terminate and be of no further force or effect
following termination of the special meeting.
Readers are cautioned that the foregoing list of factors is
not exhaustive. Additional information on other factors that could
affect the operations or financial results of Petromanas are
included in reports on file with applicable securities regulatory
authorities, including but not limited to; Petromanas' Annual
Information Form for the year ended December
31, 2014, which may be accessed on Petromanas' SEDAR profile
at www.sedar.com.
The forward-looking information contained in this press
release is made as of the date hereof and Petromanas
disclaims any intention or obligation to update publicly
or revise any forward-looking information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws. The forward-looking statements
contained in this news release are expressly qualified by this
cautionary statement.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Petromanas Energy Inc.