HOUSTON, TEXAS and CALGARY, ALBERTA -- (Marketwired) -- 04/26/13 -- Cub Energy Inc. ("Cub") (TSX VENTURE: KUB) and Anatolia Energy Corp. ("Anatolia") (TSX VENTURE: AEE) are pleased to announce that they have entered into an arrangement agreement (the "Arrangement Agreement") providing for the acquisition (the "Transaction") by Cub of all the issued and outstanding common shares of Anatolia ("Anatolia Shares") in exchange for common shares of Cub ("Cub Shares") pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the "ABCA").
Pursuant to the terms of the Transaction, shareholders of Anatolia will receive 0.106 of a Cub Share for each Anatolia Share held (the "Exchange Ratio"). The Exchange Ratio represents a market-to-market exchange ratio based on the 10 day volume weighted average trading prices of the shares of each of Cub and Anatolia on the TSX Venture Exchange (the "TSXV") as at April 24, 2013. The board of directors of each company has approved the Transaction.
The exchange ratio of 0.106 represents a value of $0.025 for each Anatolia Share. Anatolia shareholders will receive approximately 13.9 million Cub Shares. After giving effect to the Arrangement Agreement, Cub will have approximately 311.7 million Cub Shares outstanding (pro-forma the private company acquisition announced March 8, 2013). Upon closing, it is anticipated that 4.5% of the issued and outstanding Cub Shares will be held by existing Anatolia shareholders.
The Arrangement Agreement requires the approval of Anatolia shareholders and contemplates that Anatolia will hold a meeting of its shareholders on or prior to June 30, 2013 to permit shareholders to vote on the Arrangement.
Pro-Forma Transaction Highlights
The Transaction creates a stronger, more diversified combined company expanding upon Cub's existing assets:
-- The addition of 1,162,856 gross acres (581,429 net) of land in Turkey which is highly prospective for both conventional and unconventional resources which compliments Cub's existing land position of 244,000 gross (180,000 net) acres in two productive Ukrainian basins pro-forma Cub's private company acquisition announced March 8, 2013.-- Cub's producing Ukraine assets (current production net to Cub is approximately 1,550 boe/d) will now be underpinned by a larger portfolio of exploration opportunities and a significant potential shale oil resource play: -- Steady cash flow and production growth via current operations with significant development upside in recently acquired neighboring blocks; and -- Significant shale potential in Turkey offers the opportunity to increase Cub's potential reserves and production-- Assumption of approximately $2.5 million of cash, restricted cash and inventory to fund a portion of the go forward work program in Turkey.-- Both Ukraine and Turkey offer strong gas prices and compelling netbacks - currently the local gas price received in the Ukraine is in excess of $8.09 per mcfe while in Turkey it is in excess of $9.50 per mcfe. Oil prices in both countries are based on Brent pricing.-- Well-established local joint venture partner in Turkey on eleven licences through Anatolia's joint venture agreement with Calik Petrol Arama Uretim Sanayi ve Ticaret A.S., the wholly-owned oil and gas subsidiary of the large Turkish conglomerate Calik Holding A.S.-- Turkey is a natural extension for Cub's business plan of establishing a meaningful position in a neighboring country prospective for large resource-in-place assets: -- The Anatolia assets hold 94 MMbbl (47 MMbbl net)(1) of prospective, unrisked unconventional resources; and -- Anatolia estimates the gross, unrisked, conventional resources to be 37 MMbbl (17.25 MMbbl net)(2).-- Pro forma the Transaction, Cub will have net proved plus probable reserves of approximately 4.26 MMboe(2) and estimated gross, unrisked resource exposure in excess of 131 MMbbl (64.25 MMbbl net)(2).
