TIDMAEN
RNS Number : 6501C
Andes Energia PLC
20 January 2015
20 January 2015
Andes Energia plc
("Andes" or "the Company" or "the Group")
Acquisition of Interest in Interoil
The Board of Andes (AIM: AEN; BCBA: AEN) is pleased to announce
that at the Interoil Exploration and Production ASA ("IOX")
Extraordinary General Meeting, which took place today in Oslo,
Norway, the shareholders of IOX approved the issue of 330,000,000
shares in IOX to Andes representing 51% of the enlarged share
capital of IOX.
As a result of this transaction, the IOX board will be expanded
to seven members of which four will be nominated by Andes,
including the position of Chairman. The CEO, CFO and General
Manager will be appointed by the new Board of IOX.
Andes is also pleased to announce that the Bondholders of IOX
have accepted the proposed restructuring of IOX's NOK 310 million
(US$42.2 million) corporate bond (the "Bond") and the US$6.2
million debt due to Proseis AG, and replaced it with a new US$32
million bond of IOX (the "New Bond"), denominated in US$ with a
coupon of 6% per annum maturing in 2020 with the option to satisfy
coupon payments in the first 2 years by issuing additional New
Bonds to the equivalent value.
Acquisition highlights
-- Provides substantial increase in group cash flow and 2P reserves
-- Significant enhancement of Andes's operating capabilities in Colombia
-- Diversifies Group's production base to 9 producing fields in two countries
-- Addition of robust cash flow generation capable of funding
capital expenditure to target additional upside (including all
commitments), even at conservative price assumptions, as well as
servicing the new debt
-- Potential for material synergies across the portfolio given
proximity of IOX's operating licences to Andes's current assets in
Colombia
-- Management believes there is significant resource upside
-- Initial controlling 51% stake acquired with funding in place
for potential full acquisition via mandatory offer
Background on IOX
IOX operates production and exploration oil and gas licences in
Colombia and has 9 years of operating experience in the country.
Previously IOX operated in Peru also but these operations were
discontinued in November 2014. The Colombian licences currently
produce 1,571 boe/d (1,040 bbl/day oil and 531 boe/day gas), and
have approximately 5.7 MM boe of net 2P reserves* (3.5 MM bbls of
oil and 11.8 BCF of gas).
The acquisition of AEN's interest in IOX would take Andes's net
production to approximately 2,500 boepd and 2P reserves to 23 MM
boe.
*Source IOX 2013 IOX Annual Report. Reserves audited by Gaffney,
Cline & Associates Inc.
Mandatory Offer
As a result of this private placement, Andes has assumed an
obligation to launch a mandatory offer within four weeks for the
existing shares in IOX at NOK 0.11 per IOX share.
Andes has also offered to IOX bondholders a guarantee, on the
same terms as the mandatory offer, that bondholders have the option
to buy any shares tendered under the mandatory offer at NOK 0.11
per share. The mandatory offer is exclusively a cash offer and must
be outstanding for four weeks according to Norwegian law.
Alejandro Jotayan, CEO of the Company, commented:
"We are pleased to become the majority shareholder of IOX, which
will allow Andes to increase and diversify its production and
reserve base. Our management and technical capabilities established
in the region, combined with IOX's existing operational base and
personnel will contribute to accelerating the development of both
company's acreage in Colombia. We are acquiring current production,
which provides robust cash flow and additional self-funded
exploration and development potential."
Pareto Securities AS is acting as financial adviser to Andes in
this transaction.
For further information please contact:
Andes Energia plc Nicolas Mallo Huergo, Chairman T: +54 11 4110
Alejandro Jotayan, CEO 5150
Billy Clegg, Head of Communications
T: +44 20 3757
4983
Macquarie Capital (Europe) Jon Fitzpatrick T: +44 20 3037
Ltd Fergus Marcroft 2000
Nick Stamp
Westhouse Securities Antonio Bossi T: +44 20 7601
David Coaten 6100
GMP Europe LLP Rob Collins T: +44 20 7647
Emily Morris 2800
Camarco Georgia Mann T: +44 20 3757
4986
Note to Editors - Andes:
Andes is an oil and gas company focussed on onshore South
America with a market capitalisation of circa GBP183m. The Company
has operations in Argentina, Colombia, Brazil and Paraguay,
representing three of the largest economies and three of the four
largest oil producing nations in South America.
The Company has 20MMbbls of conventional 2P reserves in
Argentina and certified resources of 600MMBoe, primarily in the
Vaca Muerta unconventional formation in Argentina and 7.5 million
acres across South America.
The Company has approximately 2 million net acres in
unconventional plays including 250,000 net acres in the Vaca Muerta
formation, which is the second largest shale oil deposit in the
world and the only producing shale oil deposit outside of the USA.
Over 250 wells have already been drilled and fracked in the Vaca
Muerta formation.
Andes is the only AIM company on the London Stock Exchange with
exposure to Vaca Muerta.
The Company currently produces 1,700 bbls per day in Argentina
from 7 conventional fields, generating positive cash flow. Andes,
with its partner YPF, has 30 wells planned over the next 12 months,
which are funded by the field production cash flow.
Note to Editors - IOX:
Interoil Exploration and Production ASA is a Norwegian based
exploration and production company - listed on the Oslo Stock
Exchange - with focus on Latin-America. The company operates four
production and exploration licences in Colombia. Interoil currently
employs approximately 95 people and is headquartered in Oslo.
For the year ended 31 December 2013 turnover excluding the
Peruvian operations was US$43.6 million and with profit before tax
excluding Peruvian operations of US$12.9 million. As at 31 December
2013 IOX had gross assets of US$85 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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