Sam Malin, CEO of Avana, commented: "The acquisition of Avana by Vanoil is a major step in growing a significant East African exploration company with prospective onshore and offshore acreage across several countries. I look forward to taking up my new position within Vanoil supporting the ongoing development of a well placed regional player and striving to deliver value to shareholders."
Benefits of the Offer
This transaction will bring geological and geopolitical diversification to the existing Vanoil portfolio, including acreage in Kenya subject to the anticipated receipt of the Kenyan Asset (subject to approval by the Government of Kenya) and a new geography for Vanoil, the Seychelles, with a 25% interest in Areas A and B. The enlarged group will, following the anticipated receipt of the Kenyan Asset, hold blocks in four separate basins, two onshore and two offshore.
Following the Offer, Vanoil's net recoverable mean unrisked prospective resources will increase from 927 million boe to approximately two billion boe, accelerating Vanoil's vision of becoming an emerging leader in oil and gas exploration in East Africa.
Vanoil's and Avana's shareholders will benefit through this further diversification and consequent de-risking of Vanoil's portfolio, by providing better access to financing, joint venture partners and in-country service providers.
The Offer has been recommended by the independent board of directors of Avana and supported by Sam Malin. The Offeror will today post an offer document to all shareholders of Avana, pursuant to which the Offeror will offer to acquire the entire issued share capital of Avana for such consideration being:
-- the issue of a total of 12,500,000 common shares in Vanoil, with approximately 0.282 common shares in Vanoil being issued in exchange for each ordinary share held in the capital of Avana ("Avana Share");-- the issue of a total of 5,000,000 Vanoil warrants, with approximately 0.112 warrants granted per Avana Share held, with each whole warrant entitling the holder to purchase one common share in Vanoil at an exercise price of CAD$1.00;-- subject to the anticipated receipt by the enlarged group of the Kenyan Asset, the issue of a further 12,500,000 common shares in Vanoil, with approximately 0.282 common shares in Vanoil being issued in exchange for each Avana Share held;-- subject to the operator of the Kenyan Asset spudding a second well on Block L9, having drilled a previous well which has encountered hydrocarbons, the payment of US$2 million in cash, equating to US$0.04515012 for each Avana Share held; and-- subject to the operator of the Seychelles Asset spudding a second well on the Seychelles Asset, having drilled a previous well which has encountered hydrocarbons, the payment of US$2 million in cash, equating to US$0.04515012 for each Avana Share held.
Vanoil has agreed to guarantee the performance of the obligations of the Offeror as and when they become due in accordance with the terms of the Offer for the benefit of all shareholders of Avana and their respective successors, transferees and assigns. This guarantee remains in place irrespective of any intermediate payment or discharge in full or in part of any of the obligations by the Offeror. Exchange Minerals Limited has also agreed to defer the issue to it of certain common shares in Vanoil, in compliance with the requirements of the TSX-V.