Stream Oil & Gas Ltd. is pleased to announce that it has entered into an Arrangement Agreement to merge into TransAtlantic Petroleum Ltd. TransAtlantic, listed on TSX and NYSE MKT, is an independent E&P company with ongoing operations in Turkey and Bulgaria; The Transaction is expected to complete in November 2014.
Stream's Board supervised the extended deal process, concluding that the contemplated transaction between Stream and TransAtlantic is beneficial to Stream shareholders, providing the ability to leverage their investment through:
-The integration of Stream's assets and production, in combination with TransAtlantic's strong performance metrics, which is expected to provide imminent value accretion to Stream's shareholders.
-TransAtlantic's strong financial position which will provide access to the capital required to further exploit Stream's Albanian assets, including investments in drilling programs analogous to Stream's Albanian peers, to continue increasing production and reserves.
-TransAtlantic's established business operations which will allow the prompt shift in focus in Albanian assets from exploration & development to production centric, including reducing operating costs.
-Significant synergies which are expected through the integration of Stream's assets into TransAtlantic's regional business and field operations.
-TransAtlantic enjoys good market following, as demonstrated through broad analyst coverage and excellent market liquidity.
The Agreement provides that TransAtlantic will exchange 100% of Stream's 66,887,801 common shares for net proceeds to Stream's shareholders of US$41.2 million, payable in TransAtlantic common shares. On a per share basis, each common share of Stream will be exchanged for 0.05657 common shares of TransAtlantic, which values each common share of Stream at C$0.67 per share based on TransAtlantic's 10-day volume weighted average price ("VWAP") of US$10.89 as of market close on Friday, August 29, 2014. The C$0.67 per share value represents a 43% premium to Stream's 10-day VWAP of C$0.47 as of market close on Friday, August 29, 2014. The Agreement provides that C$0.57 per Stream common share, or 0.04812 common shares of TransAtlantic will be issued at closing; an additional C$0.10 per Stream common share, or 0.00845 common shares of TransAtlantic, will be issued in the event that certain conditions are met by Stream within nine months of the closing date. The Transaction is subject to the completion of due diligence by TransAtlantic, to be finalized by September 26, 2014 as well as the receipt of corporate, government, regulatory and court approvals, among other customary closing conditions. Having executed the Agreement, it is expected that Stream will be able to recommence the drilling of the Delvina gas field within this month.
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