Storm Ventures Wraps Up Acquisition of Silverstone Energy
Storm Ventures International announced that on December 24, 2008 it completed the acquisition of all of the outstanding shares of Silverstone Energy Limited ("SEL") that it did not already indirectly own pursuant to a share exchange. The share exchange ratio was 1.67 of a common share of SVI ("SVI Share") for each ordinary share of SEL and SVI issued approximately 34.6 million SVI Shares pursuant to the acquisition. The basis for the share exchange ratio was determined by the results of independent engineering valuations of proven and probable reserves on an after tax basis for both companies and certain other minor assets. Prior to completing the acquisition, SVI indirectly owned approximately 33% of the outstanding ordinary shares of SEL.
Following completion of the acquisition SVI has approximately 76.2 million SVI Shares outstanding and 2p reserves of 36 million barrels of oil equivalent (Mmboe).
The two companies complement each other with SEL being a focused gas play in the UKCS and SVI being a focused oil play in Tunisia. Management believes both companies have an excellent balance of leads, prospects and discoveries to progress to development and hope to see financially independent active operations funded from domestic cash flow in each area within two years. The combination simplifies the executive management structure of SVI in anticipation of a public listing sometime in the future and the increased size of the combined company is expected to be a positive attribute in attracting future capital in the current difficult market.
"Consolidating our ownership position in SEL will make it easier to manage the company for the benefit of all shareholders during this period of declining commodity prices and poor access to new capital. Dependant on commodity prices and service sector costs the combined company will internally finance a 5 well drilling program and move discoveries in both operating areas to the development approval stage. We are excited by the prospects this opportunity provides to strengthen our platform for delivery in all arenas in which we operate and feel we will have a stronger team with the inclusion of the SEL staff into SVI," said Matthew J. Brister, President and Chief Executive Officer of SVI.
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Company: Silverstone Energy more info
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