Petroamerica & Suroco Complete Plan of Arrangement

Source: 7/15/2014, Location: North America

Petroamerica Oil Corp and Suroco Energy Inc are pleased to announce that the previously announced plan of arrangement under the provisions of the Business Corporations Act (Alberta) among Petroamerica, Suroco and the shareholders of Suroco was voted on and overwhelmingly approved by holders of common shares of Suroco at the reconvened Annual General and Special Meeting of Suroco Shareholders held on July 14, 2014. Holders of over 78% of the outstanding Suroco Shares voted at the Meeting, with approximately 91.5% voting in favour of the Arrangement. The Arrangement also received approval from the Court of Queen's Bench of Alberta on July 14, 2014. The Arrangement is more fully described in the management information circular and proxy statement of Suroco dated May 27, 2014, as amended pursuant to two supplements to the management information circular, all of which may be viewed at (All dollar amounts shown herein are in Canadian Dollars).

Under the Arrangement, holders of Suroco Shares were able to elect to receive one of the following for each Suroco Share held:

- 2.2161 common shares (“Petroamerica Shares”) of Petroamerica (the “Share Consideration”);

- a cash payment for a portion of the Suroco Shares tendered and Petroamerica Shares in consideration for the balance of the Suroco Shares tendered such that, for every 100 Suroco Shares, the electing Suroco shareholder would receive approximately 164.01 Petroamerica Shares in exchange for 74.01 of those Suroco Shares (being 2.2161 Petroamerica Shares per Suroco Share) and would receive approximately $20.79 in cash for the remaining 25.99 Suroco shares (being $0.80 per Suroco Share) (the “Cash and Share Consideration”); or

- $0.80 in cash (the “Cash Consideration”).
Effective immediately, trading in Suroco Shares has ceased and all Suroco Shareholders will be provided with the consideration described above, depending on the election made by such Suroco Shareholder. Of the 135,769,734 Suroco Shares issued and outstanding on the effective date of the Arrangement, approximately 13.6% (18,505,134 shares) requested the Cash Consideration, 7.8% (10,546,300 shares) requested the Cash and Share Consideration and approximately 78.6% (106,718,300 shares) will receive the Share Consideration. As a result, Petroamerica will be paying approximately $17 million dollars pursuant to the Arrangement and issuing 253,795,411 Petroamerica Shares to Suroco Shareholders. Following completion of the Arrangement, there are approximately 858 million Petroamerica Shares outstanding.

In connection with the Arrangement, Juan Szabo, a director of Suroco, was appointed as a director of Petroamerica. Mr. Szabo is a professional engineer with over 39 years’ experience in Oil & Gas industry. After starting his career as a Design Engineer for Baker Oil Tools in Houston, Texas, he began a long career in the Venezuelan Oil industry, initially with Creole Petroleum Corporation (Subsidiary of Exxon) and later with Lagoven S.A. Pequiven S. A. and Petr?leos de Venezuela. Mr. Szabo has also served as a member of the Board of Directors of Pequiven, PDVSA Oil and Gas, Citgo Petroleum and several Joint Venture Companies. Since 2007, Mr. Szabo has served as advisor to private and public companies such as Inepetrol, CANTV, and P.T. Energi Mega Persada Tbk (Indonesia) and Alentar Holdings Inc., as well as for multilateral organizations such as the InterAmerican Development Bank (BID) and the Central Bank of Ecuador. Mr. Szabo holds B.S. and M.S. degrees in Mechanical Engineering with Petroleum Option from the University of Houston.

Pursuant to the letter of transmittal mailed to Suroco Shareholders as part of the materials in connection with the Meeting, in order to receive the Petroamerica Shares to which they are entitled, registered holders of Suroco Shares will be required to deposit their share certificate(s) representing Suroco Shares, together with the duly completed letter of transmittal, with Computershare Trust Company of Canada, Petroamerica’s and Suroco’s depositary under the Arrangement. Suroco Shareholders whose Suroco Shares are registered in the name of a broker, dealer, bank, trust company or other nominee must contact their nominee to deposit their Suroco Shares.

Over the next few weeks the combined company will take steps to consolidate its operations. The combined company will hold working interests in 11 blocks covering over 1 million gross (439 thousand net) acres in the Llanos and Putumayo Basins in Colombia. Petroamerica will also provide an operational update shortly, as well as provide updated capital spending and production estimates for the balance of fiscal 2014.

Black Spruce Merchant Capital Corp. acted as sole financial advisor to Petroamerica with respect to the Arrangement. GMP Securities L.P. and Canaccord Genuity Corp. acted as strategic advisors to Petroamerica in connection with the Arrangement.

Peters & Co. Limited acted as financial advisor to Suroco with respect to the Arrangement.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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