TORONTO, June 5, 2012 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE;
BVC: PREC; BOVESPA: PREB) today announced that it has entered into a
definitive agreement (the "Arrangement Agreement") with PetroMagdalena
Energy Corp. (TSX-V: PMD) pursuant to which the Company has agreed to
acquire all of the issued and outstanding common shares in the capital
of PetroMagdalena by way of a Plan of Arrangement under the British
Columbia Business Corporations Act (the "Arrangement").
PetroMagdalena, which is listed on the TSX Venture Exchange with a
market capitalization of approximately CDN$187 million, is a
Canadian-based oil and gas exploration and production company with
working interests in 19 properties in five basins in Colombia.
Under the Arrangement, shareholders of PetroMagdalena will, following
closing of the transaction, receive CDN$1.60 in cash for each common
share of PetroMagdalena held. In addition, holders of PetroMagdalena's
share purchase warrants (TSX-V: PMD.WT) will, following closing,
receive CDN$0.25 in cash for each unexercised warrant held. The
Company intends to finance the acquisition cost (approximately CDN$253
million) using existing cash on hand.
Ronald Pantin, Chief Executive Officer of Pacific Rubiales, said, "We
are very pleased to strike this deal with PetroMagdalena, which is
already a key provider of light oil as diluent for our crude. We
believe this acquisition is both very complementary and accretive to
our existing business."
Each company's board of directors unanimously approved the terms of the
proposed transaction. Both Miguel de la Campa and Serafino Iacono,
directors of the Company who are also directors of PetroMagdalena, did
not participate in any discussions or negotiations regarding the
approval of the proposed acquisition and abstained from the boards'
The Arrangement will be subject to, among other things, the approval of
at least 66 2/3% of the votes cast at a special meeting (the "Meeting")
of PetroMagdalena shareholders and warrantholders (voting together) to
be called to consider the Arrangement. In addition, the Arrangement
will be subject to certain conditions, including court approval,
relevant regulatory approvals and the absence of any material adverse
change with respect to PetroMagdalena. The transaction is expected to
close during the third quarter of 2012.
The Arrangement Agreement contains customary non-solicitation
provisions, subject to PetroMagdalena's right to consider and accept
superior proposals. Pacific Rubiales has been granted the right to
match competing proposals. The Arrangement Agreement contains, among
other things, a termination fee of CDN$10 million payable by either
party in certain specified circumstances.
Further information regarding the transaction will be contained in an
information circular that PetroMagdalena will prepare and mail to its
securityholders in connection with the Meeting. PetroMagdalena
securityholders are urged to read the information circular once it
becomes available, as it will contain important information concerning
the proposed transaction.
Advisor and Counsel
The Company's financial advisor is RBC Capital Markets and the Company
is being advised on legal matters by Norton Rose Canada LLP.
About Pacific Rubiales Energy Corp.:
Pacific Rubiales, a Canadian-based company and producer of natural gas
and heavy crude oil, owns 100 percent of Meta Petroleum Corp., a
Colombian oil operator which operates the Rubiales, Piriri and Quifa
oil fields in the Llanos Basin in association with Ecopetrol, S.A., the
Colombian national oil company, and 100 percent of Pacific Stratus
Energy Corp. which operates the La Creciente natural gas field. The
Company is focused on identifying opportunities primarily within the
eastern Llanos Basin of Colombia as well as in other areas in Colombia
and northern Peru. Pacific Rubiales has working interests in 43 blocks
in Colombia, Peru and Guatemala.
The Company's common shares trade on the Toronto Stock Exchange and La
Bolsa de Valores de Colombia and as Brazilian Depositary Receipts on
Brazil's Bolsa de Valores Mercadorias e Futuros under the ticker
symbols PRE, PREC, and PREB, respectively.
Cautionary Statement on Forward-looking Information
This press release contains forward-looking statements. All statements,
other than statements of historical fact, that address activities,
events or developments that the Company believes, expects or
anticipates will or may occur in the future (including, without
limitation, statements regarding estimates and/or assumptions in
respect of production, revenue, cash flow and costs, reserve and
resource estimates, potential resources and reserves and the Company's
exploration and development plans and objectives) are forward-looking
statements. These forward-looking statements reflect the current
expectations or beliefs of the Company based on information currently
available to the Company. Forward-looking statements are subject to a
number of risks and uncertainties that may cause the actual results of
the Company to differ materially from those discussed in the
forward-looking statements, and even if such actual results are
realized or substantially realized, there can be no assurance that they
will have the expected consequences to, or effects on, the Company.
Factors that could cause actual results or events to differ materially
from current expectations include, among other things: the closing of
the proposed transaction or the possibility that such transaction may
not close, delays in completing the proposed transaction, uncertainty
of estimates of capital and operating costs, production estimates and
estimated economic return; the possibility that actual circumstances
will differ from the estimates and assumptions; failure to establish
estimated resources or reserves; fluctuations in petroleum prices and
currency exchange rates; inflation; changes in equity markets;
political developments in Colombia, Guatemala or Peru; changes to
regulations affecting the Company's activities; uncertainties relating
to the availability and costs of financing needed in the future; the
uncertainties involved in interpreting drilling results and other
geological data; and the other risks disclosed under the heading "Risk
Factors" and elsewhere in the Company's annual information form dated
March 14, 2012 filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it
is made and, except as may be required by applicable securities laws,
the company disclaims any intent or obligation to update any
forward-looking statement, whether as a result of new information,
future events or results or otherwise. Although the Company believes
that the assumptions inherent in the forward-looking statements are
reasonable, forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on such
statements due to the inherent uncertainty therein.
SOURCE Pacific Rubiales Energy Corp.
For further information:
Christopher (Chris) LeGallais
Sr. Vice President, Investor Relations
+1 (647) 295-3700
Carolina Escobar V
Corporate Manager Investor Relations
+57 (1) 628-3970