CALGARY, June 26, 2014 /CNW/ - Petroamerica Oil Corp. ("Petroamerica" or the "Company") (TSX-V:PTA) confirms its intention to proceed with its proposed business combination with Suroco Energy Inc. ("Suroco"). Petroamerica's offer of $0.80 per common share of Suroco ("Suroco Share"), which can be taken up in cash, common shares of Petroamerica, or a combination of both (the "Petroamerica Arrangement"). Details regarding the choice of consideration available to holders of Suroco Shares ("Suroco Shareholders") in conjunction with the Petroamerica Offer are outlined in Petroamerica and Suroco's joint press release of June 20, 2014, and Suroco's Supplement to the Management Information Circular and Proxy Statement dated June 22, 2014.
Responses to Misleading Statements by Vetra
Petroamerica is aware of the hostile take-over bid offer by Vetra Acquisition Ltd. ("Vetra") to acquire Suroco Shares for cash (the "Vetra Offer") and of Vetra's press release earlier today in which it materially misstated Petroamerica's public statements, and refutes Vetra's misleading allegations, as follows:
- Petroamerica has not acknowledged that the Vetra Offer is superior to the Petroamerica Arrangement, contrary to what Vetra has stated publicly. Petroamerica also does not regard the Vetra Offer as superior to the Petroamerica Arrangement.
- The Petroamerica Arrangement offers Suroco Shareholders a greater certainty of completion of a transaction than the Vetra Offer.
- The Vetra Offer has not been made pursuant to a contract with Suroco. It is a hostile takeover bid made directly to Suroco Shareholders. The Vetra Offer comes with inherent business risk as there is no certainty that it will close.
- Given that Vetra is under no contractual obligation to Suroco, Vetra can amend the terms of its bid at any time (including decreasing its offer to Suroco Shareholders, or adding extra conditions). Vetra noted in yesterday's press release that it would not withdraw its offer, but at no time has it stated that it would not amend its offer.
- Vetra can also withdraw or terminate the Vetra Offer if less than 50.1% of the outstanding Suroco Shares (on a fully diluted basis) are tendered to the Vetra Offer. Vetra's publicly stated intentions to take up all of the Suroco Shares are not backed by a binding agreement.
- Petroamerica believes that Suroco Shareholders are sophisticated enough to realize that Vetra's views expressed in a press release do not constitute a legally binding agreement to purchase all of the Suroco Shares from Suroco Shareholders. Vetra has expressly reserved the right not to propose a compulsory acquisition or a subsequent acquisition transaction, so Suroco Shareholders should be aware that Vetra can gain effective control of Suroco without any obligation to acquire the outstanding Suroco Shares that are not tendered to the Vetra Offer. A Suroco Shareholder may be left holding a minority investment, at a reduced price, reflective of a minority discount in a company under the control of Vetra with reduced liquidity in the Suroco Shares.
- Vetra's statement that the Vetra Offer does not require shareholder approval is misleading. While a formal shareholder vote is not held in a takeover bid, de facto Suroco Shareholder consent is required as Vetra is only obligated to proceed with the Vetra Offer if 50.1% of the outstanding Suroco Shares (on a fully diluted basis) are voluntarily tendered to the Vetra Offer by Suroco Shareholders. If Suroco Shareholders do not agree and a majority of Suroco Shares are not tendered to the Vetra Offer, Vetra can walk away from the transaction without penalty. The resulting risk is that all Suroco Shareholders are left exposed, that no liquidity transaction will be completed at all, and Suroco Shareholders will be left holding their Suroco Shares.
- The only potential regulatory impediments to the Petroamerica Arrangement have resulted from Vetra's hostile actions. There has been no action initiated by the Alberta Securities Commission (the "ASC") with respect to disclosure relating to, or the terms and conditions of, the Petroamerica Arrangement. Neither Petroamerica nor Suroco have been compelled to appear before the ASC. There has been no determination by the ASC or any court that the disclosure in Suroco's Management Information Circular and Proxy Statement dated May 27, 2014 or Supplement to the Management Information Circular and Proxy Statement dated June 22, 2014 does not comply with securities laws in all material respects. Petroamerica believes that Suroco's disclosure complies with securities laws in all material respects.
- If the Petroamerica Arrangement is not approved, Suroco Shareholders are left with no legally binding agreement for their Suroco Shares to be acquired, as the Vetra Offer can be unilaterally changed or withdrawn.
The Petroamerica Arrangement is now scheduled to be placed before Suroco Shareholders for approval at the Annual and Special Shareholder Meeting of Suroco Shareholders which Suroco announced has been adjourned until 10:00 a.m. (Calgary time) on Monday June 30, 2014, with a proxy deadline of 8:00 a.m. (Calgary time) on such date. Suroco Shareholders reading this press release should refer to Suroco's press release dated June 25, 2014 for instructions on when, where and how to vote their Suroco Shares at the adjourned meeting scheduled for Monday June 30, 2014.
Petroamerica Oil Corp. is a Canadian oil and gas exploration and production company with activities in Colombia. Petroamerica currently produces more than 6,500 boepd and has interests in five blocks, all located in Colombia's Llanos Basin. Petroamerica's shares are listed on the TSX Venture Exchange under the symbol "PTA". A summary of the Company property holdings, including maps of the above noted acquisition, has been included in the current presentation located at www.PetroamericaOilCorp.com.
Forward Looking Statements:
This news release includes information that constitutes "forward-looking information" or "forward-looking statements". More particularly, this news release contains statements concerning expectations regarding the timing and successful completion of the Petroamerica Arrangement, the timing of the adjourned meeting of Suroco Sharehoders, the nature and timing of the Vetra Offer and other statements, expectations, beliefs, goals, objectives assumptions and information about possible future events, conditions, results of operations or performance. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, estimates, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements.
Material risk factors include, but are not limited to: the inability to obtain regulatory approval for any operational activities, inability to get all necessary approvals for completion of the Petroamerica Arrangement, the risks of the oil and gas industry in general, such as operational risks in exploring for, developing and producing crude oil and natural gas, market demand and unpredictable shortages of equipment and/or labour; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; fluctuations in oil and gas prices, foreign currency exchange rates and interest rates, and reliance on industry partners and other factors, many of which are beyond the control of Petroamerica. You can find an additional discussion of those assumptions, risks and uncertainties in Petroamerica's Canadian securities filings.
Neither Petroamerica nor any of its subsidiaries nor any of its officers, directors or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor do any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.
Readers should also note that even if the drilling program as proposed by Petroamerica is successful, there are many factors that could result in production levels being less than anticipated or targeted, including without limitation, greater than anticipated declines in existing production due to poor reservoir performance, mechanical failures or inability to access production facilities, among other factors.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Petroamerica Arrangement and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Petroamerica Oil Corp.
For further information: ABOUT PETROAMERICA, PLEASE CONTACT: Nelson Navarrete, President and Chief Executive Officer; Colin Wagner, Chief Financial Officer; Ralph Gillcrist, Chief Operating Officer and Executive Vice President; Tel Bogota, Colombia: +57-1-744-0644, Tel Calgary, Canada: +1-403-237-8300, Email: firstname.lastname@example.org, Web Page: www.PetroamericaOilCorp.com