Andes agrees Trefoil merger
24 July 2017 | 14:19pm
Trefoil indirectly owns over 99.99% of Petrolera El Trbol S.A. ("PETSA"), the operating company for the oil and gas exploration and production business of Mercuria Energy Group in Argentina.
Andes confirmed that the combination is to be effected through the acquisition of the entire issued share capital of Trefoil for the issue of 1,899,106,385 Consideration Ordinary Shares, up to 46,049,727 Deferred Consideration Shares, the Mercuria Warrants and rights to be issued the Settled Claim Shares to Upstream Capital, a subsidiary of Mercuria EG.
The Consideration Shares to be issued to Upstream Capital will represent 75.38% of the Enlarged Share Capital with existing Andes Shareholders holding 24.62%. The resulting ownership of Mercuria EG in the Enlarged Group will be approximately 78%.
In addition, the Company announced the Board will be chaired by Sir Michael Rake and its intention to rename the Enlarged Group as Phoenix Global Resources.
Nicolas Mallo Huergo, current Chairman of Andes Energia and future non-executive Director of Phoenix Global Resources said:
"The Transaction is expected to generate operating synergies and create a leading Argentinian independent exploration and production company with significant exposure to the Vaca Muerta formation, a world class resource play."
"I am delighted that Sir Michael Rake has agreed to succeed me as Chairman of the new Board which is committed to the highest standards of corporate governance."
Sir Michael Rake, proposed Chairman of Phoenix Global Resources said:
"I see great potential in Argentina as the political climate improves and becomes more pro-business. As a country, it is blessed with world class shale resources. With the scale, assets, financial resources and team the combination provides, I am confident the Enlarged Group will benefit from these encouraging trends."
Anuj Sharma, CEO of Andes Energia said:
"I expect the combination to create a stronger independent exploration and production company, and one of the most attractive Vaca Muerta asset positions in Argentina. We have an active work programme of development and exploration drilling which would not only enable us to help deliver attractive growth, by developing the Company's conventional reserve base, but also take forward our substantial unconventional resources including our position in the Vaca Muerta."
Daniel Jaeggi, President of Mercuria Energy said:
"Building upon our long-term view on investment in energy in the Americas, we are pleased to announce this next step in our cooperation with Andes Energia. We first invested in Andes in 2013, and this brings our relationship to the next level. We look forward to the enlarged group developing and expanding its business in Argentina, notably its significant exposure to the world class Vaca Muerta shale. Mercuria is expecting to remain a significant long-term shareholder in Andes, and we have confidence in the Board of directors and management of the Company, under the supervision of Sir Michael Rake, to grow the Enlarged Group using the best corporate governance practices."