Petroamerica announces completion of reverse take-over transactions

TSXV - PTA

VANCOUVER, Oct. 22 /CNW/ - Petroamerica Oil Corp. (the "Company") has completed a series of oil and gas acquisitions in Colombia which constitute a reverse takeover under TSX Venture Exchange ("Exchange") policies. Accordingly, the Company's common shares will trade effective at the market open on October 23, 2009 on the Exchange under the trading symbol PTA. The most significant of the acquisitions is the acquisition of Imore SA ("Imore"). The Company also acquired Free Traders Inc. ("Free Traders") which holds a 5% carried Participating Interest in the Arauca Block, and as disclosed on October 6, 2009, the Company entered into agreements to acquire certain property interests held by Petro Vista Energy Inc. ("Petro Vista") as well as a significant direct shareholding in Petro Vista. Full details of the transactions and detailed descriptions of the Company's property interests are contained in the Company's Filing Statement dated October 20, 2009 filed with the Exchange and posted on SEDAR. The transactions are briefly summarized as follows:

    
    Imore SA
    --------
    

The Company has acquired all of the issued and outstanding shares of Imore in consideration for 60,000,000 common shares of the Company. Imore has the right to acquire 100% Participating Interests in exploration contracts comprising over 220,000 hectares in the Oriental Cordillera Basin, the Llanos Basin, and the Middle Magdalena Basin, of Colombia. In order to acquire the initial 50% working interests, Imore was required to pay US $1 million and is required to fund a US $43 million exploration program over 36 months (including US $15 million over the first 17 months). Imore has paid $8.5 million to support guarantees for the exploration commitment and has also funded US $6.5 million of the exploration budget. Imore also acquired an option to acquire the remaining 50% balance Participating Interests in these contracts. The option was acquired at a cost of US $3 million (which was satisfied through the issuance of 12,742,800 million shares) and the option can be exercised by payment of US $50 million.

    
    Free Traders
    ------------
    

The Company acquired all of the issued and outstanding shares of Free Traders in consideration for US $5 million. Free traders holds a 5% carried Participating Interest in a Technical Evaluation Agreement respecting the Arauca Block (the "Arauca Block") in Colombia, and in any Exploration and Production Contracts resulting therefrom, including an Exploration and Production Contract which was entered into between Pacific Colombia and the Colombian Agencia Nacional de Hidrocarburos on June 30, 2009. The Arauca Block is held by Pacific Rubiales Energy Corp.

    
    Petro Vista
    -----------
    

The Company and Petro Vista have agreed that the Company will farm-in to one-half of Petro Vista's 50% participating interest in the Morichito Block located in the Llanos basin in Colombia and will also farm-in to one-half of Petro Vista's 50% participating interest in Block SSJN-5 located in the Lower Magdalena basin in Colombia ("Block 5"). In order to farm-in to the Morochito interest, the Company is required to pay Petro Vista's cost of a planned well (to a maximum of US$2.5 million) and in order to complete the Block 5 farm-in, the Company has agreed to fund 100% of Petro Vista's share of the costs of certain seismic program obligations. After the Block 5 farm-in, the Company can acquire Petro Vista's remaining 25% interest for US $3 million, payable in cash or shares. In conjunction with these farm-in arrangements, the Company agreed to purchase 25,000,000 shares and warrants of Petro Vista by way of private placement at a cost of $5 million. At closing, 9,000,000 shares and warrants were issued with the balance to be issued following approval of Petro Vista Shareholders. If shareholder approval is not received, the Company may elect to be repaid in cash or take a 25% Participating Interest in Block 5. Based on Petro Vista's current number of issued shares and presuming shareholder approval is obtained, the Company will hold 28.3% of the outstanding shares of Petro Vista, or 44.1% assuming exercise of the warrants.

    
    $45,000,000 Private Placement
    -----------------------------
    

The Company completed a private placement for gross proceeds of $45,000,000. Pursuant to the private placement the Company issued 180,000,000 units at $0.25 per unit. Each unit consists of one common share and one share purchase warrant exercisable into a common share at $0.75 per share until October 8, 2014. The private placement was conducted through a syndicate of investment dealers led by GMP Securities L.P. and Canaccord Capital Corporation and included Raymond James Ltd.

    
    New Directors and Management
    ----------------------------
    

In connection with the transactions, the Company's board of directors has been reconstituted to consist of Mr. Jeffrey Boyce, Mr. Augusto Lopez, Mr. John Zaozirny, and Mr. Michael E. Beckett. It is expected that one additional director, Mr. Paul Kroshko will be elected to the board at the Company's annual general meeting to be held on November 17, 2009.

New management of the Company has also been appointed, as follows:

Paul Kroshko, President and COO. Mr. Kroshko most recently worked with Petrominerales in Colombia where he was VP Exploration from May 2006 until leaving in May 2008. Prior to this he had been Latin America Exploration Manager for Petrobank since March 2005. During his tenure leading the exploration initiative, Petrominerales discovered several new fields including Corcel and Mapache. Petrominerales currently produces approximately 30,000 bopd from Colombia. Mr. Kroshko has held various technical and managerial positions both domestic and international, including Indonesia, North Africa and South America. Mr. Kroshko has also served as President of TechEx Corp., an independent Oil and Gas Exploration/Consulting company, from April 1993.

Wade Spark, Vice President Operations. Mr. Spark, most recently worked with Petrominerales in Colombia as Drilling and Completions Manager from June 2007 to August 2009 where he was ultimately responsible for all development and exploration drilling, testing, completion, workover and artificial lift. Mr. Spark resides in Bogota Colombia. Prior to joining Petrominerales, Mr. Spark worked for Nexen from September 2000 to May 2007 where he had been Country Drilling and Completions Manager in Yemen and previously Operations Manager in Colombia. Mr. Spark has 25 years operational and technical experience having worked in numerous domestic and international assignments including China, Guatemala, Venezuela and Russia.

Anh Vardalos, Vice President Exploration. Mrs. Vardalos started her career as a geophysicist with Crestar Energy in 1997 where she worked in northeastern British Columbia, southern Alberta and new ventures. In 2003 she joined Petrobank Energy and Resources working in the Canadian Business Unit. In May 2005 she joined Petrominerales, a subsidiary of Petrobank and was part of the exploration initiative in Colombia that discovered several new fields in the Llanos Basin. Mrs. Vardalos left Petrominerales at the beginning of October 2009.

In addition the Company has appointed an advisory committee consisting of the following

Mr. Ronald Pantin. Mr. Pantin was founder of, and is currently CEO of Pacific Rubiales Energy Corp., a TSX listed company. Mr. Pantin worked in the Venezuelan oil industry for 23 years prior to founding Pacific Rubiales in 2008. Mr. Pantin has held a number of senior positions within Petroleos de Venezuela ("PDVSA"), most recently being President of PDVSA. Immediately after PDVSA, Mr. Pantin was President of Enron Venezuela. Mr. Pantin began his professional career with Maraven, where he held a variety of positions, including Exploration & Production Planning Manager, Petroleum Engineering Manager, Treasurer, Operations Manager in the Production Division, and Corporate Planning Manager.

Ms. Gloria Lee. Ms. Lee was founder and is the general manager of ASI, an environmental management company in Colombia mainly servicing the energy sector. Ms. Lee has more than 20 years providing consulting services in the oil and gas, energy, management and environmental sectors in Colombia to multinational and domestic operators.

    
    Share Capital
    -------------
    

Following completion of the transactions, the Company has 311,987,094 shares issued and outstanding and 190,000,000 share purchase warrants outstanding. The Company has 23,050,000 options outstanding, including 18,550,000 options granted to its new directors, officers, employees, consultants, and to charities, exercisable for a period of 10 years at $0.25 per share. The 60,000,000 common shares issued to the Vendors on the Imore acquisition have been placed into escrow and will be released from escrow over 36 months.

    
    Early Warning Disclosures
    -------------------------
    

Pursuant to the transactions and the related private placement, Endeavour Financial ("Endeavour") acquired 18,000,000 common shares which, together with the 4,000,000 common shares previously owned represents 7.05% of the current issued and outstanding shares of the Company. Endeavour previously held 1,000,000 options and acquired 28,000,000 share purchase warrants, and 2,500,000 options. Assuming exercise of all of the options and warrants held, Endeavour would own an aggregate of 53,500,000 common shares, representing 15.58% of the then outstanding shares of the Company. The Company is advised that the securities were acquired by Endeavour for investment purposes. While Endeavour does not currently have any intention to acquire further securities of the Company, it may in the future acquire or dispose of securities of the Company, through the market or otherwise, as circumstances or market conditions warrant.

Pursuant to the transactions and the related private placement Peninsula Merchant Syndications Corp. and its controlling shareholder Sam Magid (together "Peninsula") acquired 31,300,000 common shares which, together with 2,600,000 shares previously owned, represents a total of 33,900,000 shares representing 10.87% of the current issued and outstanding shares of the Company. Peninsula also acquired 11,300,000 share purchase warrants, and 1,000,000 options. Assuming exercise of all of the options and warrants held, Peninsula would own an aggregate of 46,200,000 common shares, representing 14.25% of the then outstanding shares of the Company. The Company is advised that the securities were acquired by Peninsula for investment purposes. While Peninsula does not currently have any intention to acquire further securities of the Company, it may in the future acquire or dispose of securities of the Company, through the market or otherwise, as circumstances or market conditions warrant.

    
    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: For further information: Gordon Keep, Corporate Secretary & Chief Financial Officer, Tel: (604) 609-6110

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