Petro Novus Announces Armenia Acquisition
Petro Novus AG on Monday announced that it has entered into an agreement with Vangold Resources Ltd. ("Vangold") to acquire Vangold's 25% working interest share in a Petroleum Exploration and Production Sharing Agreement (the "PEPSA") for hydrocarbon and production rights in central and southern Armenia. This acquisition brings Petro Novus' working interest in the PEPSA up to 75% in an oil and gas property that covers approximately 14,000 square kilometers (3.5 million acres) in the Republic of Armenia.
Vangold will receive 7.5 million common shares of Petro Novus in exchange for its 25% working interest in the PEPSA (the "Vangold Transaction"). Following the close of the Vangold Transaction Petro Novus will hold a 75% working interest share in the PEPSA. Close of the Vangold Transaction will occur on or about May 31, 2011.
The following criteria must be met by Petro Novus to successfully execute and close the Vangold Transaction. Petro Novus is obligated to: (1) successfully complete and close on the minimum previously announced private placement Offering (hereinafter defined); (2) establish an escrow account of USD $1.5 million for the proposed spring 2011 seismic work program.
Closing of the Vangold Transaction is subject to: the approval of the directors of Vangold and the directors of Petro Novus; the receipt of necessary regulatory approval, including the approval of the TSX-V.
Cameron King, President, CEO and Chairman of Petro Novus, commented, "The acquisition of Vangold's 25% working interest in the PEPSA is a significant step forward for Petro Novus, as this acquisition greatly increases our shareholders' exposure to the value potential of Armenia's underexplored basins in an accretive manner."
Dal Brynelsen, President and CEO of Vangold Resources Ltd., stated, "We are pleased to have aligned our interests with Petro Novus through this transaction. We have great confidence in the high impact potential of the veteran technical team that Petro Novus has assembled for their upcoming exploration program in the Republic of Armenia."
Petro Novus is also pleased to announce that it has agreed on the pricing of its previously announced private placement led by Paradigm Capital Inc (the "Agent"). Petro Novus has agreed to issue a minimum of 16,666,666 Units (hereinafter defined) and up to 33,333,333 Units of Petro Novus for aggregate gross proceeds of CHF 5.0 million and CHF 10.0 million, respectively (the "Offering"). Each Unit of Petro Novus shall consist of one common bearer share of Petro Novus (a "Common Share") and one Common Share purchase warrant (a "Warrant") (collectively, a "Unit"). Each Unit will be priced at CHF 0.30. Each whole Warrant shall be exercisable into one Common Share at an exercise price of CHF 0.75 per Common Share for a period of 36 months following the closing date of the Offering.
The net proceeds from the Offering will be used to fund ongoing exploration and development expenditures, working capital, the terms outlined in the Vangold Transaction and for general corporate purposes.
The Offering is expected to close on or about May 19, 2011. Closing of the Offering is conditional upon conditions customary for transactions of this type, including the receipt of all necessary regulatory and third party approvals.
Petro Novus AG is an independent oil and gas company with an initial focus on the exploration and development of crude oil and natural gas properties in the central and southern regions of the Republic of Armenia.