CALGARY, Sept. 2, 2014 /CNW/ - Stream Oil & Gas Ltd.
(TSX-V: SKO) ("Stream" or the "Company") is pleased to announce
that it has entered into an Arrangement Agreement (the "Agreement")
to merge into TransAtlantic Petroleum Ltd (the
"Transaction"). TransAtlantic, listed on TSX and NYSE MKT, is
an independent E&P company with ongoing operations in
Turkey and Bulgaria; see www.transatlantic.com. The
Transaction is expected to complete in November 2014.
Stream's Board supervised the extended deal
process, concluding that the contemplated transaction between
Stream and TransAtlantic is beneficial to Stream shareholders,
providing the ability to leverage their investment through:
- The integration of Stream's assets and production, in
combination with TransAtlantic's strong performance metrics, which
is expected to provide imminent value accretion to Stream's
shareholders,
- TransAtlantic's strong financial position which will provide
access to the capital required to further exploit Stream's Albanian
assets, including investments in drilling programs analogous to
Stream's Albanian peers, to continue increasing production and
reserves,
- TransAtlantic's established business operations which will
allow the prompt shift in focus in Albanian assets from exploration
& development to production centric, including reducing
operating costs,
- Significant synergies which are expected through the
integration of Stream's assets into TransAtlantic's regional
business and field operations,
- TransAtlantic enjoys good market following, as demonstrated
through broad analyst coverage and excellent market liquidity.
The Agreement provides that TransAtlantic will
exchange 100% of Stream's 66,887,801 common shares for net proceeds
to Stream's shareholders of US$41.2
million, payable in TransAtlantic common shares. On a
per share basis, each common share of Stream will be exchanged for
0.05657 common shares of TransAtlantic, which values each common
share of Stream at C$0.67 per share
based on TransAtlantic's 10-day volume weighted average price
("VWAP") of US$10.89 as of market
close on Friday, August 29,
2014. The C$0.67 per
share value represents a 43% premium to Stream's 10-day VWAP of
C$0.47 as of market close on
Friday, August 29, 2014. The
Agreement provides that C$0.57 per
Stream common share, or 0.04812 common shares of TransAtlantic will
be issued at closing; an additional C$0.10 per Stream common share, or 0.00845 common
shares of TransAtlantic, will be issued in the event that certain
conditions are met by Stream within nine months of the closing
date. The Transaction is subject to the completion of due diligence
by TransAtlantic, to be finalized by September 26, 2014 as well as the receipt of
corporate, government, regulatory and court approvals, among other
customary closing conditions. Having executed the Agreement,
it is expected that Stream will be able to recommence the drilling
of the Delvina gas field within this month.
The Transaction will be implemented by way of a
court-approved plan of arrangement under the Business
Corporations Act (British
Columbia). The Transaction is conditioned upon, among other
things, the affirmative vote of at least 66 2/3% of the Stream
common shares that are voted at the shareholder meeting that will
be held to consider the Transaction.
Amongst others, the Agreement contains a
termination fee of US$2.5 million
payable to TransAtlantic if Stream accepts a superior proposal from
a third party. Stream has agreed that it will not solicit or
initiate discussions regarding any other business combination or
sale of material assets.
Full details of the Transaction will be included
in a management information circular to be mailed to Stream
shareholders in connection with the shareholder meeting at which
the Transaction will be considered. Copies of the Agreement and the
management information circular will be available under Stream's
profile at www.sedar.com.
The Board of Directors of Stream has unanimously
approved the Transaction and recommends that Stream shareholders
vote in favor of the Transaction.
Troy Valuations Inc. delivered an opinion to
Stream's Board of Directors to the effect that the purchase price
for the Stream shares is fair, from a financial point of view, to
the Stream shareholders.
Certain of the directors and officers of Stream
and certain other shareholders representing approximately 42% of
Stream's outstanding common shares, have entered into voting and
support agreements pursuant to which they have agreed to vote their
Stream shares in favor of the Transaction.
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About Stream Oil & Gas Ltd.
Stream Oil & Gas Ltd. is a Canadian-based
emerging oil and gas production, development and exploration
company focused on the re-activation and re-development of three
oilfields and a gas/condensate field in Albania. The Company's strategy is to use
proven technology, incremental and enhanced oil recovery techniques
to significantly increase production and reserves.
This news release contains forward-looking
statements that address future events and conditions and are
subject to various risks and uncertainties in relation to the
Company. Specifically, the completion of the Transaction is subject
to shareholder, court and regulatory approval, including approval
of the TSX Venture Exchange. There is no assurance that the
Transaction will be completed. Forward-looking statements are based
on the expectations and opinions of the management of the Company
on the date the statements are made. The assumptions used in the
preparation of such statements, although considered reasonable at
the time of preparation, may prove to be imprecise and, as such,
undue reliance should not be placed on forward-looking
statements.
Neither 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 Stream Oil & Gas Ltd.