As part of efforts to expand its oil exploration and production platform for the good of investors, the board of integrated energy group- Oando, on Tuesday announced an ongoing discussion with Canadian oil mining and prospecting firm- Exile Resources Incorporated, for acquisition and financing.
A joint statement to the investors through the Nigerian Stock Exchange (NSE), said both companies, on July 28, 2011, agreed on a due diligence, ahead of the acquisition “by Exile of certain interests of Oando in respect of Oil Mining Leases and Oil Prospecting Licenses, in exchange for 100,000,000 post-consolidation common shares in the capital of Exile.”
The parties have agreed to negotiate exclusively with each other in good faith and use their reasonable efforts to discuss for a definitive agreement to give effect to the Acquisition latest by September 30, 2011.
Exile, a Canada-based public company, according to the statement signed by Tony Henshaw, President and CEO of Exile, and Wale Tinubu, is currently engaged in the exploration, development and production of petroleum and natural gas in Turkey, Nigeria and Zambia. Following the transaction, it is anticipated that Exile will continue to operate in the oil and gas sector with a focus on the development of the Upstream Assets, in an effort to enhance overall shareholder value.
Tinubu, Group Managing Director of Oando Plc, is to be appointed chairman of the emergent corporation, as part of the three nominees of the Nigerian giant to be appointed on the board, leaving Exile with two, and two other independent members of the board after the restructuring is completed and approvals received. It is also expected that “the existing management team of Exile will be retained and assigned mutually acceptable roles and functions and, as a condition precedent to completion, Oando will have the right to appoint members to the management team of Exile. This board and management composition has been structured so as to integrate the expertise of experienced oil and gas executives to manage Exile’s new Upstream Assets.
“Upon completion, it is expected that the management and directors of Exile who have been appointed by Oando will receive an aggregate of 20 million options, each option exercisable for one Share at a price of $3.00 per Share for a period of five years and vesting pursuant to the terms of Exile’s stock option plan,” the statement added.
“The manner in which the acquisition will be completed will be determined after each party has had an opportunity to complete its due diligence and consider all applicable tax, securities and other laws.
As a condition precedent to signing the Definitive Agreement, Oando shall be satisfied that the Acquisition is structured to ensure that (i) each of the Nigerian assets/companies comprising the Upstream Assets maintains its status as an indigenous Nigerian company under Nigerian law in order to maintain and/or secure indigenous fiscal terms and any other policies and laws applicable to indigenous companies; and (ii) Oando achieves an optimal result having regard to tax and regulatory concerns of Oando,” the statement added.