Petra signs definitive agreement to acquire Mitra Energy

By Ruli Setiawan

TSX-listed Petra Petroleum Inc announced last week that it has entered into the definitive agreement with independent oil and gas firm Mitra Energy Ltd in respect of the previously announced proposed business combination of the two companies.

As previously disclosed, the transaction will constitute a reverse takeover of Petra pursuant to the TSX Venture Exchange policy, the company said in a statement.

?Upon completion of the transaction, Petra will be engaged in the business of exploration and development of oil and gas resources in South East Asia through Mitra,? Petra said.

Mitra is a privately owned, independent oil and gas company focused on South East Asia, with a portfolio of exploration assets and discoveries within approximately 13.9 million acres of awarded acreage across the Philippines, Vietnam, Indonesia and Thailand. As at the date hereof, Mitra has 111,425,111 shares issued and outstanding.

Pursuant to the Definitive Agreement, the parties have agreed to complete a scheme of arrangement in accordance with the laws of Bermuda, such that upon completion, Mitra will become a wholly owned subsidiary of Petra. Mitra will hold a shareholders meeting for the shareholders to approve the arrangement, which is currently expected to be held in middle of December, 2014, the statement said.

The statement provides further explanation as follows.

Pursuant to the Definitive Agreement, Petra has agreed to subscribe for US$5,000,000 of senior unsecured convertible bonds (bridge financing) pursuant to a Mitra US$50,000,000 Senior Unsecured Convertible Bond Instrument, as may be amended, due May 10, 2015. A principal amount of US$40,900,000 was subscribed for by certain bondholders in May 2013. The bonds issued pursuant to the bridge financing will rank pari passu with the existing unsecured convertible bonds.

The closing of the bridge financing is subject to certain conditions, including the delivery of support agreements agreeing to vote in favor of the arrangement executed by Mitra shareholders representing no less than 45 percent of the Mitra shares.

In the event that the conditions are not met within 30 days of execution of the Definitive Agreement, the parties are able to terminate the Definitive Agreement.

The arrangement is subject to a number of conditions, including the completion of a private placement financing (the financing) for a minimum of US$20,000,000 and up to approximately US$50,000,000 on terms and conditions to the mutual satisfaction of Petra and Mitra, to be completed by way of a subscription receipt offering into Mitra which will close prior to the closing of the arrangement. The subscription receipts will convert for no additional consideration into post consolidation shares of Mitra immediately prior to the arrangement and such shares will be acquired by Petra pursuant to the arrangement in exchange for post-consolidation shares of Petra based upon the same share exchange ratio described above. The net proceeds from the Financing will be used for: (a) exploring and developing existing assets and future other oil and gas opportunities; and (b) general working capital purposes.

Editing by Reiner Simanjuntak