2011/01/13 EIES Press Release - Acquisition of Petroland and ...
2011/01/13 EIES Press Release - Acquisition of Petroland and ...
2011/01/13 EIES Press Release - Acquisition of Petroland and ...
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ESTRELLA INTERNATIONAL ENERGY SERVICES LTD.<br />
ANNOUNCES PROPOSED ACQUISITION OF A 49% INTEREST IN<br />
PETROLAND S.A.S. AND ZIGMA COLUMBIA PETROLEUM SERVICES S.A.<br />
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES<br />
Calgary, Alberta January <strong>13</strong>, <strong>2<strong>01</strong>1</strong> – Estrella International Energy Services Ltd. (“Estrella” or the<br />
“Company”) (TSX Venture Exchange: EEN) is pleased to announce that it has entered into a<br />
letter <strong>of</strong> intent to acquire a 49% interest in <strong>Petrol<strong>and</strong></strong> SAS (“<strong>Petrol<strong>and</strong></strong>”) <strong>and</strong> Zigma Columbia<br />
Petroleum Services S.A. (“Zigma”) (collectively the “Acquisiton”). The letter <strong>of</strong> intent includes<br />
the binding right to acquire the remaining 51% at Estrella’s option. Each <strong>of</strong> <strong>Petrol<strong>and</strong></strong> <strong>and</strong> Zigma<br />
are oil <strong>and</strong> gas services companies based in Colombia.<br />
The Company will initially purchase 49% <strong>of</strong> the issued <strong>and</strong> outst<strong>and</strong>ing shares <strong>of</strong> each <strong>of</strong><br />
<strong>Petrol<strong>and</strong></strong> <strong>and</strong> Zigma for an aggregate purchase price <strong>of</strong> approximately US$10.5 Million (the<br />
“Purchase Price”). The Purchase Price will be paid in cash, <strong>and</strong> will be paid from the proceeds <strong>of</strong> a<br />
private placement financing <strong>of</strong> subscription receipts <strong>of</strong> the Company, previously announced on<br />
December 23, 2<strong>01</strong>0 (the “Financing”). The <strong>Acquisition</strong> is scheduled to close on or about Jan 20th,<br />
<strong>and</strong> is conditional upon completion <strong>of</strong> the Financing <strong>and</strong> finalization <strong>of</strong> formal documentation<br />
<strong>and</strong> is subject to regulatory approval.<br />
In connection with the <strong>Acquisition</strong>, the Company has also been granted an option to acquire an<br />
additional 11% <strong>of</strong> the issued <strong>and</strong> outst<strong>and</strong>ing shares (the “First Option”) <strong>and</strong> the final 40% <strong>of</strong> the<br />
issued <strong>and</strong> outst<strong>and</strong>ing shares (the “Second Option”) <strong>of</strong> each <strong>of</strong> <strong>Petrol<strong>and</strong></strong> <strong>and</strong> Zigma. The<br />
Purchase price for the First Option is approximately US$2.3 Million <strong>and</strong> shall be exercisable up to<br />
five (5) Business Days prior to March 31, <strong>2<strong>01</strong>1</strong>. If Estrella decides to exercise the First Option, it<br />
will automatically exercise the Second Option for which the Purchase Price will be based on the<br />
actual earnings <strong>of</strong> <strong>Petrol<strong>and</strong></strong> <strong>and</strong> Zigma for the <strong>2<strong>01</strong>1</strong> fiscal year. Closing <strong>of</strong> the Second Option is<br />
expected to occur in the first quarter <strong>of</strong> 2<strong>01</strong>2.<br />
<strong>Petrol<strong>and</strong></strong> is a well established company, with a primary operations base in BarrancaBermeja.<br />
<strong>Petrol<strong>and</strong></strong> has six workover rigs <strong>and</strong> one drilling rig, all <strong>of</strong> which are currently operating on<br />
contracts. Zigma has a reemerging presence in the Llanos basin which operates three drilling <strong>and</strong><br />
two workover rigs. Three <strong>of</strong> these rigs are currently operating on contract. With the addition <strong>of</strong><br />
the rigs from <strong>Petrol<strong>and</strong></strong> <strong>and</strong> Zigma on a combined basis Estrella will have seventeen rigs in<br />
Colombia. Both companies are headquartered in Bogota <strong>and</strong> are managed by the same executive<br />
management team, who we expect will be staying with the companies at least through the <strong>2<strong>01</strong>1</strong><br />
calendar year.<br />
Warren Levy, Chairman <strong>and</strong> CEO <strong>of</strong> Estrella commented: “We continue to successfully pursue<br />
our objectives for growth in the region. By moving to acquire <strong>Petrol<strong>and</strong></strong> <strong>and</strong> Zigma, the Company<br />
strengthens its foothold in the Colombian market <strong>and</strong> has made significant strides to both<br />
diversify our operations <strong>and</strong> customer bases.”<br />
Estrella International Energy Services Ltd.<br />
www.estrellasp.com
For further information:<br />
Estrella International Energy Services Ltd.<br />
Christian Bauwens, Chief Financial Officer<br />
Warren Levy,<br />
Chairman &Chief Executive Officer<br />
Telephone: +54 (11) 5217‐5250<br />
Facsimile: +54 (11) 5217‐5280<br />
Email:<br />
info@estrellasp.com<br />
Statements in this press release may contain forward‐looking information, including statements regarding future financing <strong>and</strong><br />
acquisition opportunities <strong>and</strong> receiving final Exchange approval. Any statements in this press release that are not statements <strong>of</strong><br />
historical fact may be deemed to be forward‐looking statements. Forward‐looking statements are <strong>of</strong>ten identified by terms such<br />
as “may”, “should”, “anticipate”, “expects” <strong>and</strong> similar expressions. Forward‐looking statements in this press release include, but<br />
are not limited to, statements with respect to the future business plans <strong>and</strong> services <strong>and</strong> final Exchange approval <strong>of</strong> the Merger.<br />
The reader is cautioned that assumptions used in the preparation <strong>of</strong> any forward‐looking information may prove to be incorrect.<br />
Events or circumstances, such as future availability <strong>of</strong> capital on favourable terms, may cause actual results to differ materially<br />
from those predicted, as a result <strong>of</strong> numerous known <strong>and</strong> unknown risks, uncertainties, <strong>and</strong> other factors, many <strong>of</strong> which are<br />
beyond the control <strong>of</strong> Estrella. The reader is cautioned not to place undue reliance on any forward‐looking information. Such<br />
information, although considered reasonable by management at the time <strong>of</strong> preparation, may prove to be incorrect <strong>and</strong> actual<br />
results may differ materially from those anticipated. Forward‐looking statements contained in this press release are expressly<br />
qualified by this cautionary statement. The forward‐looking statements contained in this press release are made as <strong>of</strong> the date <strong>of</strong><br />
this press release, <strong>and</strong> Estrella does not undertake any obligation to update publicly or to revise any <strong>of</strong> the included forwardlooking<br />
statements, whether as a result <strong>of</strong> new information, future events or otherwise, except as required by securities law.<br />
THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS<br />
SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A<br />
SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE<br />
SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,<br />
AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO<br />
U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.<br />
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies <strong>of</strong> the TSX<br />
Venture Exchange) accepts responsibility for the adequacy or accuracy <strong>of</strong> this release.<br />
www.estrellasp.com<br />
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