Petrel, through its wholly owned subsidiary, Petrel Resources (TCI) Limited, has agreed to acquire a 20 per cent shareholding in Amira from Amira Petroleum N.V., Amira is a special purpose vehicle which holds a 25 per cent carried to production interest in an early stage oil opportunity in the large, underexplored and underdeveloped province of Wasit.
The consideration for the Acquisition comprises an up-front cash payment of $500,000 and the issue of 18,947,368 shares in Petrel (“Initial Consideration Shares”), representing 19.82 per cent of the enlarged issued share capital of Petrel. The Initial Consideration Shares are locked-in until the spudding of the first conventional oil well in respect of Amira’s interest in the Wasit province (the “Spudding Date”). If the Spudding Date has not occurred by 19 August 2018, Petrel may, amongst other things, elect to re-acquire the Initial Consideration Shares for a nominal amount.
The Acquisition is conditional only on the admission of the Initial Consideration Shares to trading on AIM which is expected to take place on 19 August 2013. Completion of the Acquisition shall take place immediately following Admission.
As part of the Acquisition, Arman Kayablian, COO of Amira Industries, will join the board of Petrel as a non-executive director with effect from 19 August 2013. Arman has more than 10 years’ experience in project finance and development operations in the energy, utilities and telecommunications industries.
Under the terms of the Acquisition agreement, Petrel is also given a right of first refusal to participate or acquire an operated interest in any future exploration and production licences that Amira Industries secures in the Iraqi provinces of Muthanna, Karbala, Babil and Najaf, which are currently being pursued by Amira Industries. The terms of Petrel’s participation in such licence are subject to agreement between the parties but are likely to be similar to Amira Industries’ arrangement with Oryx Petroleum (“Oryx”) in respect of the Wasit licences.
“We are delighted to announce the expansion and diversification of our exploration portfolio with this acquisition. Petrel has a long-standing interest in Iraq. Following the recent farm out of our Irish acreage, the acquisition refocuses our efforts on one of the world’s premier hydrocarbon basins. The addition of Amira’s assets to our portfolio and the joint venture with the Kayablian family provides our shareholders with greater exposure to the world class hydrocarbon potential in Iraq,” said David Horgan, managing director of Petrel. “We are delighted to welcome Arman to the board and we look forward to working with him.”
The Acquisition is in line with Petrel’s strategy of reinforcing its existing interests in Iraq. The addition of the shareholding in Amira’s assets expands Petrel’s exploration programme scheduled for the next 18 months, with the potential to drill one or two additional wells.
In addition to the Wasit Licence, Amira Industries holds interests in exploration and production licences in other provinces in Iraq. The board of Petrel believes that Amira Industries’ reputation and local capability in Iraq mean that it is well positioned to assist Petrel in the development and expansion of its activities across the region.
