Petrominerales Announces Acquisition By Pacific Rubiales And Formation Of Brazil Focused Exploration Company

October 1, 2013

Petrominerales (TSX:PMG) (BVC:PMGC) has entered into an agreement with Pacific Rubiales Energy Corp. under which Pacific Rubiales will acquire all of the outstanding shares of Petrominerales by way of a plan of arrangement under the Business Corporations Act, the company reported in a news release. Pursuant to the Arrangement, each share of Petrominerales will be exchanged for cash consideration of C$11.00 and one share of a new Brazil-focused exploration and production company ("ExploreCo") based in Calgary, Alberta. ExploreCo will be capitalized with C$100 million cash and will hold all of Petrominerales' Brazil assets, including our talented team of technical professionals in Brazil. Concurrently, we have entered into an agreement with our partner in Brazil to acquire their entire 25% interest in certain of our Brazilian properties.

Petrominerales shareholders will receive cash consideration of C$11.00 per Petrominerales share under the Arrangement. The cash consideration (not including the value of the ExploreCo shares) represents a premium of 42% over last the closing price of the Petrominerales shares on the Toronto Stock Exchange of C$7.74 and 56% over the 20 trading day volume weighted average trading price of C$7.07. The total transaction value is approximately C$1.6 billion, including the assumption of net debt, but excluding ExploreCo's asset value and C$100 million of cash.

Source: Petrominerales, 2013.