CAMAC has signed a heads of agreement (HOA) to acquire one hundred percent of the issued share capital of Avana Petroleum Limited, a private Isle of Man company (Avana), for a purchase price of US $15 million, payable in shares of the Company's common stock. Avana is an independent oil and gas exploration group whose core area of interest centers on the western Indian Ocean and East African margin with interests in the Seychelles Islands and offshore Kenya.
The purchase is subject to a number of conditions, including the negotiation and signing of a definitive share purchase agreement, the satisfactory completion of technical, financial, and operational due diligence and the receipt of any necessary governmental and regulatory approvals. Under the HOA, the Company and Avana have agreed to negotiate in good faith, on an exclusive basis, with the intent of signing the definitive purchase agreement within thirty days. The purchase consideration is payable in shares of common stock of the Company, based on the volume-weighted average closing price of the common stock on the NYSE Amex for the thirty trading days immediately before the date of issue, in three tranches: US $10 million upon completion of the purchase; US $2.5 million six months following completion; and US $2.5 million 12 months following completion.
Avana is pursuing opportunities to take additional hydrocarbons interests throughout the wider East Africa and western Indian Ocean region.
Chairman and Chief Executive Officer Dr. Kase Lawal commented, "The Company's proposed acquisition of Avana Petroleum would expose our shareholders to what we believe to be highly prospective acreage offshore East Africa, one of the Continent's most exciting frontier oil and gas provinces. Not only are the Seychelles and Kenyan blocks surrounded by recent world class oil and gas discoveries by Anadarko, Tullow, and ENI, but they are operated by Afren and Dominion, respectively, two of the region's most skilled and experienced operators."
Dr. Lawal concluded, "Today's announcement represents a significant milestone in our strategy to acquire prime exploration acreage in Africa's frontier basins and exemplifies the Company's commitment to do so through transactions that are expected ultimately to be materially accretive to CAMAC Energy's net asset value. We look forward to updating our shareholders as we progress towards a definitive agreement and completion of this transaction."
Sam Malin, founder and Chief Executive Officer of Avana, stated, "We believe partnering with CAMAC Energy will further our strategic vision of creating an independent Pan-African exploration and production group. Completion of this transaction would also fulfill our goal of achieving a public listing on an internationally recognized stock exchange. We look forward to working with CAMAC Energy to sign a definitive agreement and complete this transaction."
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