Valeura announces execution of transformational transaction agreement in Turkey and underwritten private placement of subscription receipts
- Acquisition of its joint venture partner, Thrace Basin Natural Gas (Turkiye) Corporation ("TBNG"), for US$22 million in cash effective March 31, 2016, which after closing adjustments is expected to be reduced to approximately US$18.5 million at closing;
- Sale of deep rights on certain joint venture lands to Statoil Banarli Turkey B.V. ("Statoil") for US$15 million in two tranches of US$12 million and US$3 million; and
- Underwritten C$7.5 million private placement financing of subscription receipts of the Corporation, to be issued at a price of C$0.75 per subscription receipt.
Acquisition of TBNG
Valeura Energy Netherlands B.V., a wholly-owned affiliate of Valeura, entered into a share purchase agreement with TransAtlantic Worldwide, Ltd. to acquire 100% of the shares of its wholly-owned affiliate, TBNG, for cash consideration at closing of approximately US$18.5 million (estimate after closing adjustments). TBNG currently holds a 41.5% participating interest in the joint venture lands acquired from TBNG and Pinnacle Turkey Inc. ("PTI") in 2011 (the "TBNG JV"). Upon the closing of the acquisition, Valeura's participating interest in the shallow rights on the TBNG JV will increase to 81.5% and Valeura will become the operator. Certain consents for the TBNG Acquisition have been received from PTI, which holds an 18.5% participating interest in the TBNG JV and will remain a joint venture partner.
Sale of Deep Rights
Corporate Resources B.V. ("CRBV"), a wholly-owned affiliate of Valeura, entered into a sale and purchase agreement with Statoil, a wholly-owned affiliate of Statoil ASA, to sell Valeura's current 40% participating interest in the deep formations (below approximately 2,500 metres depth) on certain TBNG JV lands, including two exploration licences and three production leases, for cash consideration of US$12 million. The sale agreement also provides that upon the closing of this sale and the acquisition of TBNG, CRBV will cause TBNG to enter into a sale and purchase agreement with Statoil to sell an additional 10% participating interest in the deep formations below approximately 2,500 metres depth on the West Thrace lands, for cash consideration of US$3 million.
If both sales are affected, Valeura will retain a 31.5% participating interest and Statoil will acquire a 50% participating interest in the deep formations on the West Thrace lands. Valeura will retain an 81.5% participating interest in the shallow formations and an 81.5% participating interest in all formations on other TBNG JV lands.
Acquisition Financing
Valeura expects to partially fund the acquisition of TBNG with the initial US$12 million proceeds from the sale of deep rights in West Thrace to Statoil and the proceeds from a concurrent private placement financing which closed on November 3, 2016. Under the private placement agreement, Valeura sold and the syndicate of underwriters, led by Cormark Securities Inc., purchased on an underwritten private placement basis 14,629,000 subscription receipts of Valeura at a price of C$0.75 per subscription receipt, for total gross proceeds of approximately C$11 million. The gross proceeds of the offering were deposited in escrow pending the closing of the TBNG acquisition.
Valeura is a Canada-based public company currently engaged in the exploration, development and production of petroleum and natural gas in Turkey.
Further information can be found on Valeura's website.