Petroamerica and PetroNova Announce the Filing of Materials for Special Meeting of PetroNova Shareholders and Provides Information on the Expected Consolidation of Petroamerica Shares

CALGARY, July 6, 2015 /CNW/ - Petroamerica Oil Corp. (TSX-V:PTA) ("Petroamerica"), and PetroNova Inc. (TSX-V: PNA) ("PetroNova"), both Canadian oil and gas companies operating in Colombia, are pleased to confirm that PetroNova will hold a special meeting (the "Meeting") of the shareholders of PetroNova to consider and vote upon the proposed plan of arrangement (the "Arrangement") between Petroamerica and PetroNova at the offices of Borden Ladner Gervais LLP, Centennial Place, East Tower, 520 3rd Ave. SW, Calgary, Alberta at 10 AM Mountain Daylight Time on Tuesday July 28, 2015. 

PetroNova today mailed to its shareholders the Information Circular and related proxy materials with respect to the Meeting. The Information Circular and related proxy materials have also been filed with the appropriate regulators and are available for viewing under PetroNova's profile on www.sedar.com and on PetroNova's website at www.petronova.com.

Arrangement Overview
On June 15, 2015 Petroamerica and PetroNova announced that they had entered into an arrangement agreement (the "Arrangement Agreement") whereby Petroamerica had agreed to acquire all of the issued and outstanding common shares of PetroNova ("PetroNova Shares") by way of a statutory plan of arrangement under the Business Corporations Act (Alberta).  Under the Arrangement PetroNova Shares will receive 0.85 common shares of Petroamerica ("Petroamerica Shares") for each PetroNova Share held. 

The Board of Directors of PetroNova, based on a recommendation by the special committee established to consider the Arrangement, has unanimously approved the Arrangement Agreement and recommends that holders of PetroNova Shares vote in favour of the Arrangement. The PetroNova Board, based on a written fairness opinion from its financial advisor, Peters & Co. Limited, determined that the consideration to be received by the holders of PetroNova Shares pursuant to the Arrangement is fair, from a financial point of view, and determined that it is in their best interests.

The Arrangement must be approved by two thirds of the votes cast by holders of PetroNova Shares in person or by proxy at the Meeting. Completion of the Arrangement is subject to customary closing conditions, including approval by the TSX Venture Exchange and the Court of Queen's Bench of Alberta.

Share Consolidation
Based on the approval received from the Petroamerica shareholders at the Petroamerica Annual General and Special Meeting held on November 26, 2014 that authorized a consolidation of Petroamerica Shares (the "Consolidation") on the basis of up to one new common share for each ten existing common shares, the Petroamerica Board of Directors has recently authorised the Consolidation of Petroamerica Shares on a one for ten basis immediately following the closing of the Arrangement, and pending approval by the TSX Venture Exchange. It is expected that the implementation of the Consolidation will only occur upon the closing of the Arrangement. If the Consolidation is implemented in conjunction with the closing of the Arrangement, holders of PetroNova Shares will receive 0.085 post-Consolidation Petroamerica Shares for each PetroNova Share held.

The significant points relating to the shares issued under the Arrangement and the resulting expected Consolidation are as follows:

  • Petroamerica expects to issue approximately 216.4 million pre-Consolidation Petroamerica Shares assuming the Arrangement is approved by the holders of PetroNova Shares and the Arrangement is completed, which, after giving effect to the Consolidation immediately thereafter, will be approximately 21.6 million post-Consolidation Petroamerica Shares.
  • Upon completion of the Arrangement, holders of existing PetroNova warrants ("Warrants") will be entitled to receive approximately 39.2 million pre-Consolidation (approximately 3.9 million post-Consolidation) Petroamerica Shares upon the exercise of such Warrants.
  • Immediately after the completion of the Arrangement, it is projected that there will be approximately 1,088.9 million pre-Consolidation Petroamerica Shares outstanding in addition to an aggregate of 119.9 million pre-Consolidation Petroamerica Shares issuable upon the exercise of Petroamerica stock options ("Options"), historical PetroNova Warrants and Petroamerica's contingent value rights ("CVRs"), representing 11% potential dilution.
  • After giving effect to the Consolidation immediately thereafter, it is expected that there will be approximately 108.9 million post-Consolidation Petroamerica Shares outstanding and approximately 12.0 million post-Consolidation Petroamerica Shares issuable upon the exercise of Options, Warrants and CVRs, still representing 11% dilution.
  • On a fully diluted basis Petroamerica is expected to have approximately 1,208.8 million pre-Consolidation Petroamerica Shares outstanding immediately following the completion of the Arrangement, which after Consolidation will total approximately 120.9 million post-Consolidation Petroamerica Shares.

The following table describes and summarizes the projected fully diluted share capital of Petroamerica after giving effect to the completion of the Arrangement and the Consolidation of Petroamerica Shares (in 000's):


Number of Petroamerica Shares prior to giving effect to the Consolidation

Number of Petroamerica Shares after giving effect to the Consolidation

Outstanding as of June 29, 2015 and prior to the completion of the Arrangement

872,520.9

87,252.1

Issued to holders of PetroNova Shares in exchange for all PetroNova Shares

216,361.3

21,636.1

Petroamerica Shares Outstanding

1,088,882.2

108,888.2

Reserved for issuance on exercise of Options

71,785.0

7,178.5

Reserved for issuance on exercise of Warrants

39,230.8

3,923.1

Reserved for issuance on exercise of CVR's

8,864.4

886.4

Total Options, Warrants and CVR's

119,880.2

11,988.0

Total - Fully Diluted

1,208,762.4

120,876.2

For a complete description of PetroNova's assets, business and financial matters, please visit their website at www.PetroNova.com, and review their publicly disclosed information available on PetroNova's issuer profile at www.sedar.com.

Petroamerica Oil Corp. is a Canadian oil and gas exploration and production company with activities in Colombia. Petroamerica's shares are listed on the TSX Venture Exchange under the symbol "PTA". A summary of the Company's holdings can be 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 Arrangement, the timing and expected implementation of the Consolidation, 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.  Business priorities disclosed herein are objectives only and their achievement cannot be guaranteed.

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 Arrangement (including regulatory and/or shareholder approval), 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 and PetroNova's Canadian securities filings.

Neither Petroamerica, PetroNova nor any of their respective subsidiaries nor any of their respective 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.

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: PETROAMERICA OIL CORP.: Ralph Gillcrist, President and CEO or Colin Wagner, CFO, Tel Calgary, Canada: +1-403-237-8300, Email: investorrelations@pta-oil.com, Web Page: www.PetroamericaOilCorp.com; PETRONOVA INC.: Antonio Vincentelli, President & Chief Executive Officer, 954 317 3990, antonio.vincentelli@petronova.com; Abby Garfunkel, Investor Relations, 403 218 2887, agarfunkel@tmxequicom.com, Email: info@petronova.com, Web Page: www.PetroNova.com

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