Americas Petrogas Inc.

Americas Petrogas Inc.

January 04, 2016 09:00 ET

Americas Petrogas Announces Settlement With Certain Dissenting Shareholders, and Extensions to 2017 and Relinquishments on Certain Argentina Blocks

CALGARY, ALBERTA--(Marketwired - Jan. 4, 2016) -

Settlement with Certain Dissenting Shareholders

Americas Petrogas Inc. (TSX VENTURE:BOE), ("Americas Petrogas" or the "Company") announces that it has entered into settlement agreements with certain dissenting shareholders (the "Dissenting Shareholders") holding 22,523,667 common shares (the "Dissented Shares") in the capital of the Company. The consideration to be paid for the Dissented Shares will be issued in settlement of statutory rights of dissent exercised by Dissenting Shareholders in connection with the sale by the Company of all of the issued and outstanding common shares of Americas Petrogas Argentina S.A. ("APASA") to Tecpetrol International S.A. and Tecpetrol Internacional S.L (Unipersonal) (collectively, "Tecpetrol").

Under the terms of the settlement, the Dissenting Shareholders will receive $0.295 in cash and 0.22 common shares of Americas Petrogas (the "Settlement Shares") for each Dissented Share held. The cash consideration for the Dissented Shares will be paid out of the Company's existing working capital of $66.3 million ($0.286 per common share) as of September 30, 2015. The Settlement Shares are being issued at a deemed price of $0.25 per share. The combined consideration for the Dissented Shares (cash and Settlement Shares) is $0.35 per Dissented Share. The aggregate consideration for all Dissented Shares is $6,644,481.77 in cash and 4,955,206 in Settlement Shares. After cancellation of the Dissented Shares and issuance of the Settlement Shares, Americas Petrogas will have reduced its number of common shares outstanding to 216,170,645. The payment of the cash settlement amount and the issuance of the Settlement Shares is subject to receipt of final documentation from the Dissenting Shareholders and the approval of the TSX Venture Exchange.

Extensions and Relinquishments

The Company also announces that it has obtained an extension of its commitments for the Totoral block (90% operated interest and 10% is held by Gas y Petroleo del Neuquen) to December 2017. The Company has elected to relinquish its interests in the Yerba Buena and Bajada Colorada blocks. The Company's financial commitment relating to the Totoral block is estimated to be US$5.5 million.

As well, APASA, now owned by Tecpetrol, has obtained an extension of the commitments associated with the Loma Ranqueles block to June 2017. APASA, the operator, holds a 65% working interest in Loma Ranqueles while the Company holds a 25% working interest. The remaining 10% is held by Gas y Petroleo del Neuquen. The Company's remaining share of financial commitment relating to Loma Ranqueles is estimated to be US$3.7 million.

Abby Badwi, the Executive Chairman of the Company, commented, "I believe that reaching this amicable and timely resolution with the Dissenting Shareholders is in the best interests of Americas Petrogas and its shareholders and will allow management to focus its activities on growing the business and maximizing shareholder value. I am also pleased that we have been able to defer our commitment obligations for Totoral and Loma Ranqueles until 2017, which will provide us the opportunity to further evaluate the potential and plans of these blocks."

Forward-looking Information

Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact should be viewed as "forward-looking statements". These statements relate to analyses and other information that are based upon forecasts of future results, estimates or amounts not yet determinable and assumptions of management. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

There can be no assurance that such forward-looking statements will prove to be accurate as actual results and future events may vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release. In particular, there is no assurance as to when, if at all, the final documentation will be received from the Dissenting Shareholders or if the Settlement Shares will be approved for issuance by the TSX Venture Exchange. As well, there is no assurance that the Company will fulfill its commitments on the Totoral and Loma Ranqueles blocks or, if fulfilled, that actual costs of fulfilling the commitments will not vary from the estimated financial commitments. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.


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