VANCOUVER, BC, April 19, 2021 /CNW/ - Reconnaissance Energy
Africa Ltd. ("ReconAfrica") (TSXV: RECO) (OTCQX: RECAF)
(Frankfurt: 0XD) and Renaissance
Oil Corp. ("Renaissance") (TSXV: ROE) (OTCQB: RNSFF) are pleased to
announce that they have entered into a letter of intent (the "LOI")
setting forth the material terms and conditions upon which
ReconAfrica will acquire all of the issued and outstanding common
shares (the "Renaissance Shares") and convertible securities of
Renaissance (the "Transaction"). 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, ReconAfrica will issue to each holder of a
Renaissance Share 0.046 of a common share of ReconAfrica (each
whole common share, a "ReconAfrica Share") (the "Consideration").
The value of the Consideration represents a 1.45% premium over the
closing price of the Renaissance Shares on the TSX Venture Exchange
(the "TSXV") on April 16, 2021, the
last day of trading prior to the announcement of the Transaction,
and based on the closing price of the ReconAfrica Shares on the
TSX.V of $7.62 on April 16, 2021. The terms of the Transaction
value Renaissance at $.35 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%
of the fully-diluted issued and outstanding shares of
ReconAfrica.
The boards of directors of each of ReconAfrica 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, CEO of ReconAfrica.
"Renaissance Oil's right to acquire 50% 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 8,500,000
acres, which covers the entire sedimentary basin, is in an
accretive transaction for both ReconAfrica and Renaissance," stated
Craig Steinke, CEO 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 ReconAfrica 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 (the "Definitive
Agreement"), 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 ReconAfrica to vote in favour of the Transaction;
and (iv) receipt of all required corporate approvals from the board
of directors of ReconAfrica 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 TSXV and any
required third-party consents.
None of the securities to be issued pursuant to the Arrangement
Agreement have been or will be registered under the United State
Securities Act of 1933, as amended (the "U.S. Securities
Act"), or any state securities laws, and any securities issued
in the Arrangement are anticipated to be issued in reliance upon
available exemptions from such registration requirements pursuant
to Section 3(a)(10) of the U.S. Securities Act and applicable
exemptions under state securities laws. This press release does not
constitute an offer to sell or the solicitation of an offer to buy
any securities.
ReconAfrica 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 ReconAfrica holds
petroleum licenses comprising approximately 8.5 million contiguous
acres. In all aspects of its operations, ReconAfrica 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.
Renaissance is an onshore operator in
Mexico with 100% working interest
in approximately 1200 boe/day. The Company holds an option to
acquire a 50% 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
ReconAfrica.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
Cautionary Note Regarding Forward-Looking
Statements: Certain statements contained in this press
release constitute forward-looking information under applicable
Canadian, United States and other
applicable securities laws, rules and regulations, including,
without limitation, statements with respect to the completion of
the Transaction and all of the condition's precedent to the
completion of the Transaction that must be fulfilled. These
statements relate to future events or future performance. The use
of any of the words "could", "intend", "expect", "believe", "will",
"projected", "estimated" and similar expressions and statements
relating to matters that are not historical facts are intended to
identify forward-looking information and are based on ReconAfrica's
and Renaissance's current belief or assumptions as to the outcome
and timing of such future events. There can be no assurance that
such statements will prove to be accurate, as ReconAfrica's and
Renaissance's actual results and future events could differ
materially from those anticipated in these forward-looking
statements as a result of the factors discussed in the "Risk
Factors" section in ReconAfrica's annual information form dated
July 27, 2020 available under
ReconAfrica's profile at www.sedar.com and in the "Risk
Management and Rick Factors" section in Renaissance's management's
discussion and analysis for the year ended December 31, 2019. Actual future results may
differ materially. Various assumptions or factors are typically
applied in drawing conclusions or making the forecasts or
projections set out in forward-looking information. Those
assumptions and factors are based on information currently
available to ReconAfrica and Renaissance. The forward-looking
information contained in this news release is made as of the date
hereof and ReconAfrica and Renaissance undertake no obligation to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise, except as
required by applicable securities laws. Because of the risks,
uncertainties and assumptions contained herein, investors should
not place undue reliance on forward-looking information. The
foregoing statements expressly qualify any forward-looking
information contained herein.
SOURCE Reconnaissance Energy Africa Ltd.
