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UNLAWFUL.
Signs new agreement in Colombia, plans further development activity in
Argentina, and announces contemplated share issue
29 March 2021
Interoil Exploration and Production ASA (“Interoil” or the “Company”) is pleased
to announce a new transaction which adds further momentum to the Company’s
exploration activity in Colombia. In addition, Interoil will invest in further
development activity in Argentina.
In Colombia, Interoil has signed a participation agreement with SLS and Quantum
Resources for the drilling of up to two exploration wells in LLA-47, namely
Jaca.x-1 and Malevo.x-1. This agreement is subject to Interoil’s obtainment of
the funding required to meet its obligations under the agreement.
In Argentina, Interoil will invest in the re-opening of the remaining 19 wells
in the Mata Magallanes Oeste (“MMO”) oil field. The Company had earlier signed
an agreement with Argentine drilling services company Velitec SA, for the re-
opening of an initial 15 wells.
The contemplated issue of new shares in the Company (the “Share Issue”)
announced herein is aimed at securing funding for the investments mentioned
above. The Share Issue will be based on a Norwegian national prospectus covering
the offering of new shares with gross proceeds of up to NOK 37 million.
Leandro Carbone, CEO of Interoil, commented:
“These are exciting times for Interoil and our shareholders. We are very
encouraged by the overwhelming investor response from the previous share issue,
and I am looking forward to presenting to existing and new investors with the
opportunity to participate in the Company’s exploration campaign in LLA-47,
where we deepen our long-lasting partnership with SLS and Quantum Resources.
Interoil recognizes that the Jaca.x-1 and Malevo.x-1 exploration prospects are
very promising and should untap potential oil resources that could be
transformative to Interoil’s future production profile. In addition, the
complete re-opening of our wells at MMO promises to further unlock valuable
barrels in Argentina.”
Interoil will be streaming an investor webinar on 6 April at 14:00 hours CEST.
Leandro Carbone will provide a brief presentation of the Company’s investment
plans in Colombia and Argentina, followed by a Q&A session. The Company invites
all interested investors to join the online event by registering via this link:
Interoil webinar
Exploration Colombia
Drilling of the Jaca.x-1 and Malevo.x-1 exploration prospects in the LLA-47
block will commence shortly. As part of the agreement, SLS and Quantum Resources
will retain a 22 percent equity interest in the well and cover 60 percent of the
drilling expense. The cost of the Jaca.x-1 well is estimated at between US$ 2.9
million (for a dry well) and US$ 3.2 million (for a successful discovery); while
the cost for the Malevo.x-1 well is estimated at between US$ 3.1 million (for a
dry well) and US$ 3.3 million (for a successful discovery).
The Jaca.x-1 well will target the Carbonera formation. Interoil estimates the
prospective resources at Jaca.x-1 to amount to 4.0 MMbbls with a 30 percent
probability of success. The Malevo.x-1 well is a twin exploration well to
Vikingo.x-1, where the primary exploration target will be the Gacheta formation
and will also target the Carbonera formation to optimize its development.
Interoil’s exploration commitment at LLA-47 consists of a total of 9 wells to be
drilled by February 2022.
If any of the wells result in commercial discovery and production, 55% of the
net oil operating income (oil sales after royalties and operating and lifting
costs) will be allocated to repay the investments, 40% Interoil and 60% SLS and
Quantum Resources. The remaining 45% will be split as per equity interest. Once
investment pay-out is reached, then the net oil operating income will be split
as per equity interest, with 78% share to Interoil.
Argentina MMO field re-opening
Plans in Argentina involve the complete re-opening of the remaining 19 oil wells
at the MMO field. Interoil expects to reach a total daily production estimated
at around 230 bopd (from the current 17 bopd) once all wells are re-opened,
including the 120 bopd resulting from the intervention of the first 15 wells in
partnership with Velitec SA.
The investment will be carried by Interoil. Under the JV agreement, Petrominera
Chubut SE (“Petrominera”), a minority JV partner that is the Provincial
Government’s oil and gas and mining company, is not required to make cash
contributions for the proposed investment. Funding by Interoil of such portion
of the investment shall be repaid with the future net oil operating income (oil
sales after royalties and lifting costs) corresponding to Petrominera’s
participating interest that shall be allocated to reimburse Interoil until
Petrominera’s share in the investment program is fully covered. Once investment
pay-out is reached, then the net oil operating income will be split as per
equity interest, with 80% share to Interoil.
Progress with Mazorca.x-1 and first 15 wells at MMO
Interoil has already initiated contact with local communities to introduce the
scope of drilling in Mazorca.x-1. Furthermore, Interoil and Petroland SAS have
agreed on the commercial terms for the engagement of the drilling rig. The
contract is expected to be signed in the coming days.
At MMO, Interoil requested the necessary certifications and approvals of the
drilling rig prior to accepting it for the work-over program.
Share Issue
The Company is announcing an offering of new shares in the Company with gross
proceeds of up to NOK 37 million. The Share Issue is directed towards Norwegian
investors and international institutional investors pursuant to and in
compliance with applicable exemptions from relevant registration, filing and
prospectus requirements, and subject to other applicable selling restrictions.
The minimum subscription amount in the Share Issue will be NOK 10,000. The Share
Issue will be governed by a national prospectus registered in Norway (the
“Prospectus”).
The net proceeds from the Share Issue will be used for capital investments in
the well/s and development activities above-mentioned. The Company decided that
the best alternative is to raise the necessary funding for the investment
program through the Share Issue.
The subscription price in the Share Issue is established at 1.46 NOK per share.
This price was calculated on the basis of a 90-day, volume-weighted average
price plus a 10 percent discount, as of close of business 26 March 2021. The
application period commences on 6 April 2021 at 09:00 (CEST) and will close on
13 April 2021 at 16:30 hours (CEST). The Company reserves the right to close or
extend the application period at any time at its sole discretion, at short
notice.
Instructions on how to submit applications in the Share Issue, as well as
expected timeline for settlement and delivery of shares will be published by the
Company in the Prospectus which will be published by the Company prior to the
application period. The final allocation will be made at the discretion of the
Board.
The completion of the Share Issue is conditional upon approval by the Board. The
Company has considered the Share Issue in light of the equal treatment
obligations under the Norwegian Securities Trading Act and the rules on equal
treatment under Oslo Rule Book II for companies listed on the Oslo Stock
Exchange and the Oslo Stock Exchange’s Guidelines on the rule of equal
treatment, and the Board is of the opinion that the contemplated transaction is
in compliance with these requirements and guidelines. Taking into consideration
the time, costs and expected terms of alternative methods of the securing the
desired funding, the Board has concluded that offering new shares in a Share
Issue on acceptable terms at this time is in the common interest of the
shareholders of the Company.
Advokatfirmaet Schjødt AS is acting as legal advisor to the Company in
connection with the Share Issue.
Please direct further questions to ir@interoil.no (mailto:ir@interoil.no)
Registration for the webinar on 6 April 2021: Interoil webinar
Interoil Exploration and Production ASA is a Norwegian based exploration and
production company - listed on the Oslo Stock Exchange - with focus on Latin
America. The Company is operator and license holder of several production and
exploration assets in Colombia and Argentina. Interoil currently employs
approximately 50 people and is headquartered in Oslo.
SLS is a Colombian drilling services company.
Quantum Resources is a Colombian E&P company.
This notice contains information which is considered inside information pursuant
to the European Market Abuse Regulation. The notice has been published by Mr.
Geir Arne Drangeid (Partner and Senior Advisor, First House AS) at 08:30 CEST on
29 March 2021.
The notice is subject to the disclosure requirements pursuant to section 5 -12
of the Norwegian Securities Trading Act.
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