The Boards of Directors of both companies have approved the transaction. The acquisition is expected to close in November 2014.
Stream is a publicly traded oil and gas company based in Calgary, Alberta. It owns 100% interests in three oil fields, one gas field and one exploration license in Albania, which encompass approximately 75,000 net acres. For the three months ended May 31, 2014, Stream had gross production of 1,522 BO per day and net production of 973 BO per day. As of November 30, 2013, Stream reported net proved reserves of 20.9 MMBOE under Canadian National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities".
"We are adding a third source of production and cash flow growth to our company," commented N. Malone Mitchell 3rd, Chairman and CEO of TransAtlantic. "This acquisition will provide us with geologic and geographic diversification. The properties contain three fractured carbonate reservoirs with exploitation potential similar to our Selmo field in Turkey, with a large volume of known oil in place. We plan to analyze and streamline the oil field operations before implementing a growth plan with which we expect to predictably increase production."
The agreement provides that TransAtlantic would acquire 100% of Stream’s 66,887,801 common shares for US$41.2 million of TransAtlantic common shares. On a per share basis, each common share of Stream would 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, would be issued at closing and an additional C$0.10 per Stream common share, or 0.00845 common shares of TransAtlantic, would be issued in the event that certain amendments to Stream’s Albanian license agreements are received within nine months of the closing date. The transaction is subject to the completion of due diligence by TransAtlantic to its sole satisfaction on or before September 26, 2014 and the receipt of corporate, government, regulatory and court approvals, among other customary closing conditions.
