CALGARY, ALBERTA -- (Marketwired) -- 04/25/13 -- Kulczyk Oil Ventures Inc. (WARSAW: KOV) ("KOV"), an international upstream oil and gas exploration and production company, is pleased to announce that it has entered into an agreement (the "Arrangement Agreement") with Winstar Resources Ltd. ("Winstar") pursuant to which KOV will acquire all of the issued and outstanding shares of Winstar (the "Acquisition").
The combination of Warsaw-listed KOV with Winstar will have 4,760 barrels of oil equivalent per day(1) ("boe/d") of production in Tunisia and Ukraine and an attractive exploration portfolio in Brunei and Romania.
Acquisition Highlights and Rationale
-- Under the terms of the Acquisition, Winstar shareholders will be entitled to receive 7.555 shares of KOV or C$2.50 in cash, subject to a maximum of C$35 million in cash;-- The Acquisition values the entire issued and to be issued share capital of Winstar at approximately C$112 million(2);-- As a condition of the Acquisition, KOV will apply to list its shares on the Toronto Stock Exchange ("TSX"), undertake a 10:1 share consolidation and be renamed Serinus Energy Inc.;-- The Company will continue to be listed on the Warsaw Stock Exchange ("WSE");-- Upon closing, Bruce Libin and Evgenij Iorich, current directors of Winstar, will join the KOV board as non-executive directors;-- The Acquisition represents a material increase in KOV's reserves and production, acquiring 11.2 million barrels of oil equivalent ("MMboe") of working interest 2P reserves and approximately 1,660 boe/d of current net production(1);-- The Acquisition provides the ability for KOV to leverage its proven operational expertise to materially increase production, reserves and cash flow from Winstar's assets;-- The Acquisition is anticipated to result in a company with: -- 13 licences across five countries, with operatorship on all licences; -- 20.6 MMboe of working interest 2P reserves and approximately 4,760 boe/d of current net production(1); -- Continuous development drilling in Ukraine and Tunisia targeting substantial increases in production; and -- High-impact exploration drilling in Brunei and Romania;-- The Winstar Board is recommending that Winstar shareholders vote in favour of the Acquisition and KOV has received support agreements from 54.2% of Winstar shareholders, including all of the directors and officers of Winstar, to vote in favour of the Acquisition at the Winstar shareholder meeting.
(1) First half April production of 1,660 boe/d from Winstar and approximately 3,100 boe/d from KOV
(2) Share Consideration (as defined below), based on the closing price of KOV of PLN1.28 on 24 April 2013 (approximately C$0.41 based on the Bank of Canada noon spot rate on the same date) and 36.0 million diluted Winstar shares
Analyst Conference Call and Presentation
An invitation only analyst conference call and presentation have been scheduled for Thursday, 25 April 2013 at 5:00pm (Warsaw) / 11:00am (Toronto), and the presentation will be made available on KOV's website at www.kulczykoil.com. Details for this call will be sent individually to analysts.