Petromanas Energy Inc. has acquired 100% interest in three Albanian onshore oil and gas production sharing contracts containing six licence areas. Similar to Bankers Petroleum, the Endeavour Financial group is behind the formation of this Albania-located deal. Bankers and its shareholders enjoyed significant success with their Albanian oil field reworks, and while a very different type of play, Petromanas also has an exceptional risk-reward profile.
Petromanas' acquisition is in a major onshore exploration area with P50 recoverable resources of 6.1 billion barrels net to Petromanas proved by drilling of a deep well by Occidental Petroleum, seismic exploration and independent, NI 51-101 compliant valuations. Petromanas paid 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. On February 25th the common shares came off their acquisition-pending regulatory "halt" and commenced trading under the symbol PMI on the TSX Venture Exchange, after announcing the closing of their transactions.
Petromanas acquired 100% of Manas Adriatic GmbH ("Manas Adriatic") from DWM Petroleum ("DMW"), a wholly-owned subsidiary of Manas Petroleum. As consideration for the acquisition, Petromanas paid $2.0 million, issued 100,000,000 common shares and paid off approximately US$8.5 million in loans previously taken 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 private placement funding of 100,000,000 units at a price of $0.25 per unit for gross proceeds of $25,000,000. Each unit consists of one common share and one common share purchase warrant, with each warrant entitling the holder to purchase a further common share at a price of $0.45 per share for a period of 5 years expiring February 23, 2015. The common shares and warrants are subject to a hold period expiring June 25, 2010. We participated in the company's financing as previously disclosed.
The Petromanas strategy is to focus on an established petroleum province. Albania offered the best opportunity to acquire a large portfolio of giant oil and gas assets, and to diversify with large, deep underthrust and shallow plays in a proven production area.
Under previous communist control, Albania was virtually closed to international expertise until the 1990's, offering a compelling opportunity for leading edge, aggressive developers. Albania has an established petroleum system and with Patos Marinza the largest onshore field in Europe. Patos Marinza is located in selected exclusion zones within Manas Adriatic`s block 2 and 3. Manas Adriatic has the rights to explore for and produce oil from the deeper targets in this area.
Manas Adriatic holds three Production Sharing Contracts (PSCs) for onshore Blocks in Albania that comprise 1.7 million net acres with a 100% working interest. The PSCs encompass Blocks A, B, D, E in which there have been eleven large structures already identified and Blocks 2 and 3 which contain three large structures.
Petromanas' acquisition covers 6.1 billions of barrels net to Petromanas recoverable resources (P50) proved by around 4300 km seismic exploration, 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) and drilling of maximum two wells with each maximum 3000 m (Can $ 8.85 million) 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 source rock column of light oil (around 37^0 API). There are additional large exploration targets ready to drill south of the Shpiragu discovery in blocks 2 and 3 and additional deep and shallow targets in blocks A, B, D and E.
Additional information on Petromanas and the Licenses is available in the filing statement dated February 19, 2010 and in reports prepared pursuant to National Instrument 51-101, all of which are available on SEDAR (www.sedar.com).
Options, Fees and Legal Matters
Petromanas has issued 23,500,000 options to directors, officers, employees, consultants and charities at a price of $0.30 expiring on February 24, 2020. Petromanas has also issued 4,000,000 common shares to Endeavour Financial pursuant to their mandate agreement and a further 4,000,000 common shares to Overseas Financial Group as a finders' fee, which are subject to a hold period expiring June 25, 2010.
As a result of the Manas Adriatic acquisition, DWM has ownership and control over 100,000,000 common shares of Petromanas and the right to acquire a further 150,000,000 common shares. The 100,000,000 common shares represent 30.47% of the issued and outstanding common shares of Petromanas, making DWM an insider. Assuming DWM acquired the additional 150,000,000 common shares it would hold 250,000,000 common shares representing 52.28% of the partially diluted issued and outstanding shares of the Petromanas.
A copy of the Early Warning Report filed with the applicable securities regulators regarding the transaction is available on SEDAR ( www.sedar.com).
link : http://www.resourceinvestor.com/2010/03/04/petromanas-energy-adds-onshore-sharing-contracts