Petro Andina Resources Inc.
TSX : PAR

Petro Andina Resources Inc.

October 01, 2009 19:34 ET

Petro Andina Announces Meeting of Shareholders to Approve Arrangement

CALGARY, ALBERTA--(Marketwire - Oct. 1, 2009) -

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Petro Andina Resources Inc. ("Petro Andina") (TSX:PAR) is pleased to announce that it has received an interim order from the Alberta Court of Queen's Bench authorizing the holding of a special meeting (the "Meeting") of Petro Andina shareholders to approve the previously announced Plan of Arrangement transaction (the "Arrangement") involving, among others, Petro Andina, Parex Resources Inc. ("Parex") (formerly 1485196 Alberta Ltd. and also referred to as "ExploreCo") and Pluspetrol Resources Corporation N.V. The Meeting is scheduled for 10:30 a.m., October 30, 2009, at the Lecture Theatre, Metropolitan Conference Centre, 333 - 4th Avenue S.W., Calgary, Alberta. Full details respecting the Meeting and the Arrangement, as well as information respecting Petro Andina and Parex, are set forth in the notice of special meeting and information circular (the "Information Circular") of Petro Andina dated September 29, 2009. The Information Circular is to be mailed to Petro Andina shareholders on or about October 2, 2009. The Information Circular will be available for viewing electronically under Petro Andina's profile on SEDAR at www.sedar.com.

Under the terms of the Arrangement, Petro Andina shareholders will ultimately receive, for each Petro Andina Class A share held:

- $7.65 in cash;

- one common share of Parex (a "Parex Share"); and

- one-tenth of a Parex Share purchase warrant (a "Parex Warrant"). Each whole Parex Warrant will entitle the holder to purchase one Parex Share at a price of $3.00 per share until that date which is 30 days from the effective date of the Arrangement.

Parex has applied to list the Parex Shares and the Parex Warrants on the TSX Venture Exchange (the "TSXV") (Tier 2). Such listing will be subject to Parex fulfilling all of the minimum listing requirements of the TSXV. There can be no assurance that the TSXV will list the Parex Shares or the Parex Warrants.

The Arrangement must be approved by a resolution of Petro Andina shareholders passed by not less than two-thirds of the votes validly cast at the Meeting. Directors and executive officers of Petro Andina (who, together with their associates and affiliates, own or exercise control or direction over approximately 9.16% of the issued and outstanding Petro Andina common shares) have agreed to support and vote in favour of the Arrangement. In addition, the Arrangement must be approved by a majority of the votes cast by Petro Andina shareholders, after excluding the votes cast by persons whose votes may not be included in determining minority approval of a business combination pursuant to Multilateral Instrument 61-101.

It is anticipated that the Arrangement will be completed in early November 2009 if Petro Andina shareholders approve the Arrangement, subject to obtaining court approval and the required governmental and regulatory approvals and satisfying other usual and customary conditions contained in the amended and restated arrangement agreement dated September 29, 2009.

The Board of Directors of Petro Andina has considered the Arrangement at length and has unanimously determined that the Arrangement is in the best interests of Petro Andina and the Petro Andina shareholders and has, based upon, among other things, the opinions of its financial advisors, unanimously determined that the Arrangement is fair, from a financial point of view, to Petro Andina shareholders. Accordingly, the Board of Directors has unanimously approved the Arrangement and unanimously recommends that shareholders vote in favour of the Arrangement.

Also at the Meeting, Petro Andina shareholders will be asked to consider ordinary resolutions to: (i) approve a private placement of Parex Shares to management of Parex for gross proceeds of not less than $6 million and not more than $10 million at a price of $3.00 per Parex Share (the "Management Private Placement"), (ii) approve the Parex stock option plan, and (iii) approve a shareholder rights protection plan for Parex.

About Parex

As discussed in Petro Andina's September 3, 2009 press release, Parex was formed to participate in the Arrangement, to become a new exploration company to be owned by former Petro Andina shareholders. Pursuant to the Arrangement, Parex and its subsidiaries are to carry on the business currently carried on by Petro Andina's subsidiaries in Colombia and Trinidad & Tobago. Accordingly, Parex will, after closing the Arrangement, have a portfolio of prospects in onshore Trinidad & Tobago and in the Llanos Basin in Colombia that have been advanced through Petro Andina's efforts over the past two years. Specifically, Parex will have exploration contracts for 4 onshore blocks in Colombia with 489,000 gross acres and 3 onshore blocks in Trinidad & Tobago with 218,400 gross acres.

Further, after closing of the Arrangement, the current Petro Andina management and Board of Directors, having extensive international and technical experience, will continue on with Parex. The Arrangement thereby provides Petro Andina shareholders with the opportunity to participate directly in an accelerated, fully funded high-growth potential exploration company in attractive jurisdictions.

About Petro Andina

Petro Andina is engaged in oil and natural gas exploration, development and production in South America and the Caribbean region. The Company is continuing to develop its existing reserves and to conduct appraisal and exploration drilling on its 628,000 acre (346,000 net acre) land position in the Neuquen Basin of Argentina. Exploration activities have also begun on its 489,000 acre (244,500 net acre) exploration contracts in the Llanos Basin of Colombia and 211,000 acre (105,500 net acre) exploration contracts onshore Trinidad & Tobago. Petro Andina is headquartered in Calgary, Canada.

Petro Andina has retained Kingsdale Shareholder Services Inc. to act as information agent. Any questions or requests for assistance may be directed to Kingsdale at 1-866-581-0508 or email contactus@kingsdaleshareholder.com.

This news release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction. All sales will be made through registered securities dealers in jurisdictions where the offering has been qualified for distribution. The securities offered are not, and will not be, registered under the securities laws of the United States of America, nor any state thereof and may not be sold in the United States of America absent registration in the United States or the availability of an exemption from such registration.

Forward-Looking Statements

Certain statements regarding Petro Andina or Parex, including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond Petro Andina or Parex's control. Specifically, and without limitation, all statements included in this press release that address activities, events or developments that either Petro Andina or Parex expects or anticipates will or may occur in the future, including management's assessment of future plans and operations and statements with respect to the Arrangement and associated financings, timing of the final order or the Court approving the Arrangement and the effective date of the Arrangement and the stock exchange listing of securities issued under the Arrangement, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond Petro Andina or Parex's control. These risks may cause actual financial and operating results, performance, levels of activity and achievements to differ materially from those expressed in, or implied by, such forward-looking statements.
Although Petro Andina and Parex believe that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Such risks and uncertainties include, but are not limited to: the impact of general economic conditions in Canada, Argentina, Colombia and Trinidad & Tobago, industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced, in Canada, Argentina, Colombia and Trinidad & Tobago, competition, the lack of availability of qualified personnel, fluctuations in commodity prices, the results of exploration and development drilling and related activities, imprecision in reserve estimates, the production and growth potential of Petro Andina's assets, fluctuations in foreign exchange or interest rates, the ability to access sufficient capital from internal and external sources, obtaining required approvals of regulatory authorities, in Canada, Argentina, Colombia and Trinidad & Tobago and consummation of the Arrangement being dependent on the satisfaction of customary closing conditions, the approval of Petro Andina's shareholders and the approval of the Court. Many of these risk factors are discussed in further detail in Petro Andina's Annual Information Form dated March 31, 2009 on file with Canadian securities commissions and in the Information Circular, which will be filed under Petro Andina's profile on SEDAR at www.sedar.com. Readers are also referred to the risk factors described in other documents that Petro Andina files from time to time with securities regulatory authorities.

Although the forward-looking statements contained in this Press Release are based upon assumptions which management believes to be reasonable, neither Petro Andina or Parex can assure shareholders that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this press release, Petro Andina and Parex have made assumptions regarding: current commodity prices and royalty regimes; timing of receipt of regulatory approvals; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil and natural gas; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; royalty rates; future operating costs; and other matters.

Accordingly, neither Petro Andina nor Parex give any assurance nor make any representations or warranty that the expectations conveyed by the forward-looking statements will prove to be correct and actual results may differ materially from those anticipated in the forward-looking statements. Neither Petro Andina or Parex undertake any obligation to publicly update or revise any forward-looking statements other than required by applicable securities law.

The Toronto Stock Exchange has not received and does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Petro Andina Resources Inc.
    Michael Kruchten
    Manager, Investor Relations
    (403) 517-1733
    (403) 265-8216 (FAX)
    or
    Petro Andina Resources Inc.
    Kenneth G. Pinsky
    Vice President, Finance and Chief Financial Officer
    (403) 517-1729
    (403) 265-8216 (FAX)