Energia
AFRICA OIL ANNOUNCES INVESTMENT IN IMPACT OIL AND GAS
(TSX: AOI) (OMX: AOI) (“Africa Oil”, “AOC” or the “Company”) is pleased to announce that it has entered into agreements that will provide it with an approximately 25.2% equity interest in Impact Oil and Gas Limited (“Impact”), a private UK company with exploration assets in South and West Africa.
The Company has entered into a subscription agreement (the “Subscription Agreement”) with Impact providing for the purchase by AOC of 59,681,539 ordinary shares (the “Shares”) and 29,840,769 ordinary share purchase warrants (the “Warrants”) for an aggregate subscription price of approximately US$15 million. The Warrants have an exercise price of £0.25 per Share and an expiry date of April 27, 2021, subject to early expiration in the event of a liquidity event in respect of Impact. The Warrants are subject to customary adjustment provisions in respect of anti-dilution matters. The Subscription Agreement also provides that during the nine (9) month period after closing of the transactions contemplated by the Subscription Agreement, AOC may acquire, at the election of either AOC or Impact, an additional 9,946,923 Shares and 4,973,461 Warrants for an aggregate subscription price of approximately US$2,500,000.
The Company has also entered into a share purchase agreement (the “Helios SPA”) with Helios Natural Resources 2 Ltd. (“Helios”) to acquire 70,118,381 Shares and 15,529,731 warrants currently held by Helios in the capital of Impact (the “Helios Warrants”) in exchange for 13,946,545 common shares of AOC (the “AOC Shares”). Upon completion of the transactions contemplated by the Helios SPA, the Helios Warrants will have an exercise price of £0.18 per Share for a 12 month period, and if not exercised during such period, £0.25 thereafter and the same expiry date as the Warrants. The Helios Warrants are also subject to customary adjustment provisions in respect of anti-dilution matters.
Finally, the Company has entered into an investors agreement (“Investors' Agreement”) with Impact and certain other shareholders of Impact. The Investors' Agreement provides AOC with the right to nominate up to two members of the board of directors of Impact (which may consist of a maximum of nine (9) members) based on certain share ownership thresholds and consent rights with respect to certain fundamental matters in respect of Impact, including the future issuance of securities of Impact. The rights pursuant to the Investors' Agreement will cease upon AOC holding less than 10% of the Shares.
Africa Oil CEO Keith Hill commented, “We are very pleased to acquire a significant interest in Impact which holds a highly attractive portfolio in West and South Africa that has the potential for major discoveries in the short and medium term. Impact has done a great job of acquiring these properties at modest prices and bringing in major oil companies to fund upcoming drilling and seismic programs. This investment is a strong complement to our existing holdings in Africa Energy and ECO Atlantic and results in Africa Oil having exposure to some of the most exciting exploration plays in Africa to complement our Kenya development project. The structure of these investments allows us to preserve the necessary cash to ensure we can get to first oil without issuing additional equity.”
The transactions contemplated by the Subscription Agreement and Helios SPA are subject to certain customary conditions to closing, including approval of the Toronto Stock Exchange and shareholder approval of Impact. The Helios SPA is subject to concurrent closing of the transactions contemplated by the Subscription Agreement, provided that the transactions contemplated by the Subscription Agreement are not conditional on the transactions contemplated by the Helios SPA.
The transactions contemplated by the Helios SPA constitute a “related party transaction” within the meaning of Multilateral Instrument 61-101- (“MI 61-101”) as Helios is a “related party” of AOC because it beneficially owns or controls more than 10% of the outstanding AOC Shares. The Company is relying on the exemptions from the formal valuation and minority approval requirements of MI 61-101 contained in subsections 5.5(a)(iv) and 5.7(1)(a), respectively, of MI 61-101, as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transactions contemplated by the Helios SPA exceeds 25 percent of AOC's market capitalization. The AOC Shares to be issued to Helios will have a hold period in accordance with applicable Canadian securities law for a period of four (4) months and one day from their date of issuance.
PillarFour Securities LLP is acting as financial advisor and Pareto Securities is acting as strategic advisor to Africa Oil in connection with the transactions described herein.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933 , as amended, (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya and Ethiopia, including the South Lokichar Basin (25% working interest in Blocks 10BB and 13T), where the Company and its Joint Venture Partners are undertaking activities aimed at sanctioning development. The Company is listed on the Toronto Stock Exchange and on Nasdaq Stockholm under the symbol "AOI".
Impact Oil and Gas acquired its first asset, the Tugela South Exploration Right, offshore South Africa in 2011 and has subsequently expanded its asset base across the offshore margins of South and West Africa. It has since partnered with ExxonMobil and Statoil (South Africa), CNOOC (AGC – between Senegal and Guinea Bissau) and Total (Namibia and South Africa). It is currently seeking a partner in its Gabonese assets. The company's current portfolio covers a combined area of over 90,000 km² (gross).
Impact is a pure exploration company with a strategic focus on large scale, mid to deep water plays of sufficient size to be of interest to major companies. Its management is committed to further expanding this attractive portfolio of exploration assets and securing these large independent and major oil companies as partners. The company's objective is to build a world class portfolio, in a number of different geologic and geographic locations to minimise risk and with a large enough portfolio to ultimately enhance the chance of drilling success. Management believes that by doing so, and by having oil industry partners validate its exploration concepts and ideas, it aims to deliver substantial shareholder value in the medium to longer term. Impact is currently privately owned.
The information in this release is subject to the disclosure requirements of the Company under the EU Market Abuse Regulation and the Swedish Securities Market Act. This information was publicly communicated on February 7, 2018 at 3:00 a.m. Eastern Time.
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