Mr. Scot Evans of Reconnaissance Energy reports
RECONAFRICA ENTERS INTO LETTER OF INTENT TO ACQUIRE RENAISSANCE OIL
Reconnaissance Energy Africa Ltd. and Renaissance Oil Corp. have entered into a letter of intent (LOI) setting forth the material terms and conditions upon which Reconnaissance Energy Africa will acquire all of the issued and outstanding common shares and convertible securities of Renaissance. The transaction is expected to be implemented by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia).
Pursuant to the LOI, Reconnaissance Energy Africa will issue to each holder of a Renaissance share 0.046 of a common share of Reconnaissance Energy Africa. The value of the consideration represents a 1.45-per-cent premium over the closing price of the Renaissance shares on the TSX Venture Exchange on April 16, 2021, the last day of trading prior to the announcement of the transaction, and based on the closing price of the Reconnaissance Energy Africa shares on the TSX Venture Exchange of $7.62 on April 16, 2021. The terms of the transaction value Renaissance at 35 cents per share or approximately $155-million. Following the completion of the transaction, current shareholders of Renaissance will hold approximately 20,340,792 shares or 11.36 per cent of the fully diluted issued and outstanding shares of Reconnaissance Energy Africa.
The boards of directors of each of Reconnaissance Energy Africa and Renaissance, respectively, have unanimously approved the entering into of the LOI. The companies have agreed to a 30-day exclusivity period to, among other things, negotiate and settle a definitive agreement.
"With ReconAfrica's recent drilling success in the Kavango basin, the company has determined it is in the best interest of ReconAfrica shareholders to consolidate all interests," stated Scot Evans, chief executive officer of Reconnaissance Energy Africa. "Renaissance Oil's right to acquire 50-per-cent working interest in 2.2 million acres in the eastern part of the Kavango basin (Botswana) is potentially very valuable to ReconAfrica as it pursues the development of conventional resources in the basin."
"Consolidating all interests in the Kavango basin to 8.5 million acres, which covers the entire sedimentary basin, is in an accretive transaction for both ReconAfrica and Renaissance," stated Craig Steinke, chief executive officer of Renaissance. "The combined company will solely focus on the development of the deep Kavango basin while exploring strategic alternatives for the Mexican assets."
The LOI is non-binding and there is no assurance that the transaction will be completed as proposed or at all. The completion of the transaction is subject to, among other things: (i) completion of satisfactory due diligence by each of Reconnaissance Energy Africa and Renaissance; (ii) negotiation of a definitive agreement and the entering into of a binding definitive agreement in connection with the transaction, to include standard non-solicitation, superior proposal and right to match provisions, following receipt by the board of directors of Renaissance of a fairness opinion in connection with the transaction and the board of directors resolving to unanimously recommend that shareholders of Renaissance vote in favour of the transaction; (iii) the entering into by the directors and officers of Renaissance of support and lock-up agreements on terms satisfactory to Reconnaissance Energy Africa to vote in favour of the transaction; and (iv) receipt of all required corporate approvals from the board of directors of Reconnaissance Energy Africa and Renaissance, respectively, and all regulatory and shareholder approvals, including majority of the minority shareholder approvals, as applicable, any competition or foreign investment approvals, and the approval of the TSX-V and any required third party consents.
About Reconnaissance Energy Africa Ltd.
Reconnaissance is a junior, Canadian oil and gas company engaged in the opening of the newly discovered deep Kavango sedimentary basin, in the Kalahari Desert of northeastern Namibia and northwestern Botswana, where the company holds petroleum licences comprising approximately 8.5 million contiguous acres. In all aspects of its operations, Reconnaissance is committed to minimal disturbances in line with international best standards, and will implement environmental and social best practices in all of its project areas.
About Renaissance Oil Corp.
Renaissance is an onshore operator in Mexico with 100-per-cent working interest in approximately 1,200 barrels of oil equivalent per day. The company holds an option to acquire a 50-per-cent working interest, in all rights from surface to basement, in a large petroleum licence, comprising 2.2 million acres in the Kavango sedimentary basin, in Botswana, Africa. The licence operator is Reconnaissance Energy Africa.
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