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PetroLatina Energy Plc (“PetroLatina” or the “Company”)
Update on Financing
05/27/2008
PetroLatina, the oil and gas exploration and production company focused on Colombia, with interests in Guatemala, is very pleased to announce, following the announcement made on 25 April 2008, that final terms and conditions have been agreed with Tribeca Oil and Gas, Inc. (“TOGI”), a company of Tribecapital Partners S.A. (“Tribeca”), a Colombian Private Equity Firm, to invest up to US$25 million in the Company. TOGI has immediately invested US$10 million in the Company by way of convertible secured loan notes (the “Notes”). Subject to the satisfaction of a number of conditions precedent, including completion of Tribeca’s legal and technical due diligence, TOGI will invest a further US$15 million by way of a subscription for 8,835,120 Shares. Upon such subscription, the Notes will automatically convert into 5,890,080 Shares, and any related security will be released. TOGI will also receive a further 1,875,260 warrants exercisable upon the exercise of the Company’s existing warrants into 1,875,260 Shares. The subscription is expected to be completed by 30 June 2008, or such other date as TOGI and the Company may agree. The funds will provide the Company with additional cash resources to meet certain outstanding liabilities and fund its ongoing work programme in Colombia. The Company is embarking on a promising development and exploration programme over the next few months, and intends to commence drilling a minimum of four wells during the second half of 2008. Following completion of the subscription, TOGI will hold Shares representing a 35% interest in the Company. The transaction represents an investment by TOGI at a price of £0.76 per Share on a fully diluted basis, or £0.86 per Share on an issued share capital basis. Luc Gerard, President of Tribeca, has been invited to join the Company’s board as a Non-executive Director. It is expected that upon completion of the subscription for Shares, a second Tribeca nominee will join the PetroLatina board as a Non-executive Director. Further announcement to this effect will be made in due course. Acquisition of Petroleos del Norte (“PDN”) Under the original terms of the PDN acquisition, a second cash payment of US$13 million was due upon the extension of the Tisquirama licence. As announced on 29 November 2007, PetroLatina reached agreement with the vendors of PDN to make a cash payment of US$7 million and to issue to one of the vendors PetroLatina shares to the value of US$3 million at a price of £0.50 per share (£0.10 per share pre-consolidation). In November 2007, former President of PDN was appointed as CEO of PetroLatina. Application will be made for the new ordinary shares to be admitted to trading on AIM and admission is expected to occur on ___ May 2008. Non-applicability of The City Code on Takeover and Mergers (“City Code”) The City Code is issued and administered by the Panel on Takeovers and Mergers (the “Panel”) pursuant to the Companies Act 2006. The City Code applies to all takeovers and merger transactions, however effected, where the offeree company is, inter alia, a listed or unlisted public company resident in the UK, the Channel Islands or the Isle of Man and to certain categories of private limited companies. In June 2006, PetroLatina completed the acquisition of Petroleos del Norte S.A. in Colombia. Following this acquisition, the majority of PetroLatina’s directors were based outside of England and board meetings since then have been held overseas. Accordingly, whilst PetroLatina is a public limited company registered in England, its central place of management and control is currently outside the United Kingdom and therefore PetroLatina is not currently resident in the United Kingdom, the Channel Islands or the Isle of Man for the purposes of the City Code. As a result, the provisions of the City Code do not currently apply to PetroLatina and its shareholders are not entitled to the protections afforded by the City Code. Greg Smith, Chairman of PetroLatina, said: “The investment by Tribeca will secure the future of the Company and enable us to fund our planned programme of exploration and appraisal wells. We expect to drill a minimum of four wells across our three licence areas in Colombia by the end of this year. Our plan is to increase proven reserves, production and cash flow considerably through the drill programme.” Luc Gerard, President of Tribeca, said: “We’re delighted to have been able to secure a substantial stake in PetroLatina. With current production and extensive exploration and development potential in Colombia, plus increasing throughput at the Company’s Rio Zulia - Ayacucho pipeline, it is clear that the Company has a tremendous potential of increasing its value.” Enquiries:
Additional Information on PetroLatina Energy Plc PetroLatina Energy Plc (AIM: PELE), formerly known as Taghmen Energy Plc, was founded in 2004. The Company is presently focused on Colombia after the sale of its assets in Guatemala in which it retains a 20% interest in three wells to be drilled in the near future. In Colombia, the Company holds 40% and 20% interests in the Los Angeles and Santa Lucía fields on the Tisquirama licence, respectively, and a 100% interest in the Doña María field which together provided a daily production of approximately 450 barrels per day in the first six months of 2007. In November 2007 the Company secured the extension of the Tisquirama licence for the economic life of the fields. In April 2006 the Group acquired an interest in two exploration blocks with an 85% interest in Midas and an 80% interest in La Paloma. PetroLatina also owns the Río Zulia-Ayacucho pipeline in the prolific Catatumbo basin which transports crude oil. Present exploration/exploitation activities in this area should increase the volume of the crude oil resulting in an increased cash flow. Further information is available on the Company’s website (www.petrolatinaenergy.com). About Tribecapital Partners S.A. Tribeca Fund I, FCP, is a Colombian private equity fund managed by Tribecapital Partners S.A. The fund has total investment commitments of US$135 million, from multilateral investors and institutional investors in Colombia such as pension and severance pay funds. Further information is available on Tribeca’s website (www.tribeca.com.co). |
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