PetromanasEnergy Inc. has acquired 100% interest in three Albanian onshore oiland gas production sharing contracts containing six licence areas.Similar to Bankers Petroleum, the Endeavour Financial group is behindthe formation of this Albania-located deal. Bankers and itsshareholders enjoyed significant success with their Albanian oil fieldreworks, and while a very different type of play, Petromanas also hasan exceptional risk-reward profile.
Petromanas' acquisition is in a major onshore exploration area withP50 recoverable resources of 6.1 billion barrels net to Petromanasproved by drilling of a deep well by Occidental Petroleum, seismicexploration and independent, NI 51-101 compliant valuations. Petromanaspaid less than 5 cents per recoverable barrel Market Valuation.
Petromanas is the newly-minted name for former shell WWI Resources(WWI-TSXv), about which we sent out a heads-up on December 4th. OnFebruary 25th the common shares came off their acquisition-pendingregulatory "halt" and commenced trading under the symbol PMI on the TSXVenture Exchange, after announcing the closing of their transactions.
Petromanas acquired 100% of ManasAdriatic GmbH ("Manas Adriatic") from DWM Petroleum ("DMW"), awholly-owned subsidiary of Manas Petroleum. As consideration for theacquisition, Petromanas paid $2.0 million, issued 100,000,000 commonshares and paid off approximately US$8.5 million in loans previouslytaken out by Manas Adriatic to acquire the Licenses.
In addition, Petromanas will issue 150,000,000 common shares to DWM as follows:
- 100,000,000 common shares on the earlier of June 23, 2011 or the completion of the first well on the Licenses held by Manas Adriatic;
- 25,000,000 common shares upon receipt of a report prepared pursuant to NI 51-101 confirming that the Licenses have 2P reserves of not less than 50,000,000 boe; and
- upon receipt of a NI 51-101 compliant report confirming 2P reserves in excess of 50,000,000 boe, for each additional 50,000,000 boe 500,000 common shares will be issued, to a maximum of 25,000,000 common shares.
Petromanas has closed a privateplacement funding of 100,000,000 units at a price of
.25 per unit forgross proceeds of $25,000,000. Each unit consists of one common shareand one common share purchase warrant, with each warrant entitling theholder to purchase a further common share at a price of
.45 per sharefor a period of 5 years expiring February 23, 2015. The common sharesand warrants are subject to a hold period expiring June 25, 2010. Weparticipated in the company's financing as previously disclosed.
The Petromanas strategy is to focuson an established petroleum province. Albania offered the bestopportunity to acquire a large portfolio of giant oil and gas assets,and to diversify with large, deep underthrust and shallow plays in aproven production area.
Under previous communist control, Albania was virtually closed tointernational expertise until the 1990's, offering a compellingopportunity for leading edge, aggressive developers. Albania has anestablished petroleum system and with Patos Marinza the largest onshorefield in Europe. Patos Marinza is located in selected exclusion zoneswithin Manas Adriatic`s block 2 and 3. Manas Adriatic has the rights toexplore for and produce oil from the deeper targets in this area.
Manas Adriatic holds three Production Sharing Contracts (PSCs) foronshore Blocks in Albania that comprise 1.7 million net acres with a100% working interest. The PSCs encompass Blocks A, B, D, E in whichthere have been eleven large structures already identified and Blocks 2and 3 which contain three large structures.
Petromanas' acquisition covers 6.1 billions of barrels net toPetromanas recoverable resources (P50) proved by around 4300 km seismicexploration, drilling and independent 51-101 compliant valuations(Gustavson Associates LLP).
Petromanas finalized a 189 km 2-D seismic program in 2009.Additional 105 km 2D seismic acquisition (Can $ 4.8 million) anddrilling of maximum two wells with each maximum 3000 m (Can $ 8.85million) is planned during the next twelve months.
Occidental Petroleum drilled on block 2 a 5,333 m deep well in 2001.Oxy declared an oil discovery and the Shpiragu field has a 600 m sourcerock column of light oil (around 37° API). There are additional largeexploration targets ready to drill south of the Shpiragu discovery inblocks 2 and 3 and additional deep and shallow targets in blocks A, B,D and E.
Additional information on Petromanas and the Licenses is availablein the filing statement dated February 19, 2010 and in reports preparedpursuant to National Instrument 51-101, all of which are available onSEDAR (www.sedar.com).
Options, Fees and Legal Matters
Petromanas hasissued 23,500,000 options to directors, officers, employees,consultants and charities at a price of
.30 expiring on February 24,2020. Petromanas has also issued 4,000,000 common shares to EndeavourFinancial pursuant to their mandate agreement and a further 4,000,000common shares to Overseas Financial Group as a finders' fee, which aresubject to a hold period expiring June 25, 2010.
As a result of the Manas Adriatic acquisition, DWM has ownership andcontrol over 100,000,000 common shares of Petromanas and the right toacquire a further 150,000,000 common shares. The 100,000,000 commonshares represent 30.47% of the issued and outstanding common shares ofPetromanas, making DWM an insider. Assuming DWM acquired the additional150,000,000 common shares it would hold 250,000,000 common sharesrepresenting 52.28% of the partially diluted issued and outstandingshares of the Petromanas.
A copy of the Early Warning Report filed with the applicablesecurities regulators regarding the transaction is available on SEDAR (www.sedar.com).