Petromanas to acquire Gallic Energy as part of continental European strategy

    




 CALGARY, Oct. 2, 2012 /CNW/ - Petromanas Energy Inc. ("Petromanas" or the "Company")  and  Gallic Energy Ltd. ("Gallic")  are pleased to jointly  announce that they have entered into an agreement (the "Arrangement  Agreement") whereby Petromanas will acquire 100% of the issued and  outstanding class A shares of Gallic ("Gallic Shares"), in exchange for  common shares of Petromanas ("Petromanas Shares"), by way of a  statutory plan of arrangement (the "Arrangement").  The transaction is  expected to close in the fourth quarter of 2012 provided all required  Gallic securityholder, court and regulatory approvals are obtained. 

 Under the terms of the Arrangement, holders of Gallic shares ("Gallic  Shareholders") will receive, in exchange for each Gallic Share held,  0.3736 of a share of Petromanas (the "Exchange Ratio"). The Exchange  Ratio represents a value of approximately $0.07 per Gallic Share, based  on the volume weighted average price of Petromanas Shares on the TSX  Venture Exchange (the "TSXV") for the ten trading days ended October 1,  2012 and a premium of 11% to the volume weighted average price of  Gallic Shares on the TSXV for the same period. 

 In addition, under the terms of the Arrangement Agreement, all of  Gallic's outstanding options will be exercised in accordance with their  terms, or, surrendered or otherwise terminated prior to the closing of  the Arrangement. Pursuant to the Arrangement, all holders of Gallic  warrants will receive replacement warrants of Petromanas exercisable  for Petromanas Shares equal to that number of Gallic Shares which were  otherwise issuable upon exercise of the Gallic warrants previously  held, multiplied by the Exchange Ratio, with the exercise price  adjusted accordingly. 

 Petromanas anticipates issuing an aggregate of approximately 62.65  million common shares in connection with the Arrangement, at a deemed  purchase price in respect of the Arrangement of approximately $10  million. After giving effect to the Arrangement, Petromanas will have  approximately 693 million common shares outstanding. 

 "This transaction provides shareholders of both companies with an  opportunity to access an expanded portfolio of European assets on  favourable terms," said Glenn McNamara, CEO of Petromanas. "Petromanas  has always planned to diversify and complement its Albanian exploration  portfolio with additional European assets. The combined exploration  assets are focused on proven petroleum producing basins and offer  exposure to a variety of play and commodity types while diversifying  risk across the portfolio. Our subsurface expertise currently being  utilized in Albania is a very good fit for Gallic's naturally fractured  carbonate assets in France's Aquitaine Basin. In addition, fiscal  terms, regional commodity prices and infrastructure access in France  are very attractive for conventional assets. We feel this is a cost  effective way to expand Petromanas' exploration portfolio and our solid  balance sheet will permit ongoing exploration activities across the  unified asset base to proceed in an orderly and timely fashion from a  position of strength." 

 The Arrangement Agreement provides for, among other things, a  non-solicitation covenant on the part of Gallic, subject to customary  "fiduciary out" provisions, that entitles Gallic to consider and accept  a superior proposal and a right in favour of Petromanas to match any  superior proposal. If the Arrangement Agreement is terminated in  certain circumstances, including if Gallic enters into an agreement  with respect to a superior proposal or if the Board of Directors of  Gallic withdraws or modifies its recommendation with respect to the  proposed transaction, Petromanas is entitled to a termination payment  in cash of $350,860.  A complete copy of the Arrangement Agreement will  be available under Petromanas' issuer profile on SEDAR at www.sedar.com. 

 The Gallic Board of Directors, after consulting with its financial and  legal advisors, has unanimously (other than one Gallic director who  recused himself from the process of considering the proposed  transaction) determined that the Arrangement is in the best interests  of Gallic and that the consideration being offered to Gallic  Shareholders is fair, from a financial point of view, to the Gallic  Shareholders. The Gallic Board has resolved to unanimously recommend  that Gallic Shareholders and Gallic warrantholders vote their shares  and warrants in favour of the Arrangement at the special meeting (the  "Gallic Meeting") of Gallic Shareholders and warrantholders (voting  together as a single class) to be held on or about November 30, 2012. 

 The directors and senior officers of Gallic have entered into support  agreements with Petromanas to vote their Gallic Shares and Gallic  warrants in favour of the Arrangement at the Gallic Meeting. 

 Completion of the transaction is subject to customary closing  conditions, including court approval of the Arrangement; approval of  two-thirds of the votes cast by holders of Gallic Shares and Gallic  warrants (voting together as a single class) in person or by proxy at  the Gallic Meeting; and applicable government and regulatory approvals  by, among others, the relevant authorities in Canada, France and  Australia (if required). 

 Full details of the transaction will be included in an information  circular to be mailed to Gallic Shareholders and warrantholders in  accordance with applicable securities laws. A copy of the information  circular and related documents will be filed under Gallic's issuer  profile on SEDAR at www.sedar.com. 

 Black Spruce Merchant Capital Corp is acting as financial advisor to  Petromanas with respect to the Transaction.  Raymond James Ltd. has  provided the board of directors of Petromanas with its verbal opinion  that, subject to its review of the final form of documents effecting  the Transaction, the consideration payable pursuant to the Arrangement  is fair, from a financial point of view, to the shareholders of  Petromanas.  National Bank Financial Inc. is acting as strategic  advisor to Petromanas.  Petromanas' legal advisor is Norton Rose Canada  LLP. 

 Gallic's Board of Directors has received a fairness opinion from  Macquarie Capital Markets Canada Ltd. that, subject to the assumptions  and limitations contained therein, the consideration to be received by  Gallic Shareholders pursuant to the Arrangement is fair, from a  financial point of view, to the Gallic Shareholders.  Gallic's legal  advisor is Davis LLP. 

 About Gallic Energy Ltd. 

 Gallic is an international oil and gas company with assets in France and  Australia. Current operations are focused on France and, in particular,  on the Aquitaine Basin where Gallic holds a 100% working interest in  approximately 320,000 net acres of exploration lands. Gallic also holds  acreage in the prospective Canning Basin in Australia. 

 About Petromanas 

 Petromanas 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 three Production Sharing  Contracts ("PSCs") with the Albanian government. Under the terms of the  PSCs, the Company has a 100% working interest in Blocks A, B, D, and E  and a 50% working interest in Blocks 2 and 3 that comprise more than  1.4 million gross acres across Albania's Berati thrust belt. 

 Forward-Looking Information 

 This press release contains forward-looking forward-looking information  and statements within the meaning of applicable securities laws and are  based on the expectations, estimates and projections of management of  Petromanas and Gallic 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 or  statements. More particularly and without limitation, this press  release contains forward-looking information and statements concerning:  the anticipated benefits of the Arrangement to Petromanas and Gallic  and their respective shareholders, including anticipated synergies; the  timing and anticipated receipt of required regulatory, court and  securityholder approvals for the transaction; the ability of Petromanas  and Gallic to satisfy the other conditions to, and to complete, the  Arrangement; the anticipated timing of the mailing of the information  circular regarding the Arrangement, the holding of the Gallic Meeting  and the closing of the Arrangement. 

 In respect of the forward-looking information and statements concerning  the anticipated benefits and completion of the proposed Arrangement and  the anticipated timing for completion of the Arrangement, Petromanas  and Gallic have provided such in reliance on certain assumptions that  it believes are reasonable at this time, including assumptions as to  the time required to prepare and mail securityholder meeting materials,  including the required information circular; the ability of Petromanas  and Gallic to receive, in a timely manner, the necessary government,  regulatory, court, securityholder, stock exchange and other third party  approvals, including but not limited to the receipt of applicable  competition approvals and foreign government approvals; the ability of  Petromanas and Gallic to satisfy, in a timely manner, the other  conditions to the closing of the Arrangement; and expectations and  assumptions concerning, among other things: commodity prices and  interest and foreign exchange rates; planned synergies, capital  efficiencies and cost-savings; applicable tax laws; future production  rates; the sufficiency of budgeted capital expenditures in carrying out  planned activities; and the availability and cost of labour and  services. The anticipated dates provided may change for a number of  reasons, including unforeseen delays in preparing meeting materials,  inability to secure necessary securityholder, government, regulatory,  court or other third party approvals in the time assumed or the need  for additional time to satisfy the other conditions to the completion  of the Arrangement.  Accordingly, readers should not place undue  reliance on the forward-looking information and statements contained in  this press release. In respect of the forward-looking information and  statements, Petromanas and Gallic have provided such in reliance on  certain assumptions that it believes are reasonable at this time,  including assumptions in respect of: prevailing commodity prices,  margins and exchange rates; that Petromanas' future results of  operations will be consistent with past performance and management  expectations in relation thereto; the continued availability of capital  at attractive prices to fund future capital requirements relating to  existing assets and projects, including but not limited to future  capital expenditures relating to expansion, upgrades and maintenance  shutdowns; the success of growth projects; future operating costs; that  counterparties to material agreements will continue to perform in a  timely manner; that there are no unforeseen events preventing the  performance of contracts; and that there are no unforeseen material  construction or other costs related to current growth projects or  current operations. 

 Since forward-looking information and statements address future events  and conditions, by their very nature they involve 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 and Gallic operate in general such as:  operational risks; delays or changes in plans with respect to growth  projects or capital expenditures; costs and expenses; health, safety  and environmental risks; commodity price, interest rate and exchange  rate fluctuations; environmental risks; competition; failure to realize  the anticipated benefits of the Arrangement and to successfully  integrate Gallic and Petromanas; ability to access sufficient capital  from internal and external sources; and changes in legislation,  including but not limited to tax laws and environmental regulations.  Risks and uncertainties inherent in the nature of the Arrangement  include the failure of Petromanas or Gallic to obtain necessary  securityholder, government, regulatory, court and other third party  approvals, or to otherwise satisfy the conditions to the Arrangement,  in a timely manner, or at all. Failure to so obtain such approvals, or  the failure of Petromanas or Gallic to otherwise satisfy the conditions  to the Arrangement, may result in the Arrangement not being completed  on the proposed terms, or at all. 

 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, Gallic and the  combined company, 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,  2011 which may be accessed on Petromanas' SEDAR profile at www.sedar.com and the Annual Information Form of Gallic for the year ended December  31, 2011 which may accessed on Gallic's SEDAR profile. 

 The forward-looking information and statements contained in this press  release are made as of the date hereof and Petromanas undertakes no  obligation to update publicly or revise any forward-looking information  or statements, whether as a result of new information, future events or  otherwise, unless so required by applicable securities laws. 

 Neither TSXV nor its Regulation Services Provider (as that term is  defined in the policies of the TSXV) accepts responsibility for the  adequacy or accuracy of this release. 

  

   

Petromanas Energy Inc.


CONTACT:  For further information with respect to Gallic Energy Ltd. pleasecontact:William H. (Bill) SmithPresident and Chief Executive OfficerGallic Energy Ltd.Tel: [phone]orDean CallawayVice President Finance and Chief Financial OfficerGallic Energy Ltd.Tel: (403) [e-mail] further information with respect to Petromanas Energy Inc. pleasecontact:Glenn McNamara, CEOHamid Mozayani, COO Bill Cummins, CFOPetromanas Energy Inc.Suite 1720, 734 - 7th Avenue SWCalgary, AlbertaCanada T2P 3P8Tel: [phone]Fax: [phone]Email: [e-mail]:  www.petromanas.comThe Equicom GroupNick Hurst300 5th Avenue SW, 10th FloorCalgary, AlbertaCanada T2P 3C4Tel: [phone]Fax: [phone] [e-mail] 


    

Copyright