VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/15/13 -- Vanoil Energy Ltd., ("Vanoil") (TSX VENTURE: VEL), a TSX-V-listed oil and gas company with a portfolio of assets in East Africa, is pleased to announce that Vanoil and its wholly-owned subsidiary, Vanoil Energy Holdings Ltd. (the "Offeror") has entered into a warranty and implementation agreement with the majority shareholders (being Exchange Minerals Limited, Carinia Holdings Limited and Mr. Sam Malin (the "Principal Shareholders")) of Avana Petroleum Limited ("Avana") and will today make an offer to acquire the entire issued share capital of Avana on the terms set out below (the "Offer").
-- All share transaction recommended by the independent board of directors of Avana and supported by Avana's CEO, Sam Malin, with irrevocable undertakings to accept the Offer from the Principal Shareholders, representing approximately 82 % of Avana's issued share capital.-- The Principal Shareholders have undertaken to procure that the Offer is accepted by certain other shareholders of Avana to ensure that the Offeror has received valid acceptances in respect of at least 90% of Avana's issued share capital (the "Acceptance Condition"). Accordingly, it is expected that the Offer will become wholly unconditional later today.-- Increases, at completion, Vanoil's net recoverable mean unrisked prospective resources from 927 million barrels of oil equivalent ("boe") to approximately two billion boe. The Company will file in short order a National Instrument 51-101 report on the Seychelles Asset and Kenyan Asset (as defined below), which will be available on SEDAR.-- Brings geological and geopolitical diversification to the existing Vanoil portfolio with Avana's: -- 25% participating interest in oil and gas exploration Areas A and B in the Seychelles ("Seychelles Asset"), alongside partner East African Exploration Seychelles Limited (a wholly owned subsidiary of Afren plc ("Afren")); and -- anticipated receipt of a 10% participating interest in Kenya offshore Block L9 (the "Kenyan Asset"), alongside partner Dominion Petroleum Kenya Limited (a wholly owned subsidiary of Ophir Energy plc ("Ophir"))-- Accelerates Vanoil's exploration program by facilitating the conduct of two 3D seismic surveys in 2013 and several drilling events in 2014, at the latest.-- Sam Malin, the CEO and founder of Avana, to be appointed to Vanoil's Board of Directors.
Aaron D'Este commented: "The vision of Vanoil's Board of Directors is to provide a compelling and robust proposition for investors committed to oil exploration in East Africa. The proposed acquisition of Avana will accelerate Vanoil towards this goal. In a single transaction, Vanoil will potentially double its net recoverable mean unrisked prospective resources, reduce risk through diversification, and gain well-known and reputable joint venture partners with extensive experience across Africa. We are also delighted that Sam Malin has agreed to join the Board of Vanoil and pleased to note that the share-for-share nature of the deal preserves our cash position. We believe that the acquisition of Avana will prove to be a transformational event for Vanoil and its shareholders and we note that the anticipated US$27 million cash from our previously announced Fluormin acquisition will greatly assist with the rapid execution of work programs across our entire portfolio."