Cub Energy Inc. (TSX: V.KUB, Stock Forum) and Anatolia Energy Corp. (TSX: V.AEE, Stock Forum) have entered into an arrangement agreement providing for the acquisition by Cub of all the issued and outstanding common shares of Anatolia in exchange for common shares of Cub pursuant to a plan of arrangement under the Business Corporations Act (Alberta).
The exchange ratio represents a market-to-market exchange ratio based on the 10 day volume weighted average trading prices of the shares of each of Cub and Anatolia on the TSX Venture Exchange as at April 24, 2013.
According to the Cub Energy press release, pursuant to the terms of the transaction, shareholders of Anatolia will receive 0.106 of a Cub share for each Anatolia share held.
The transaction creates a stronger, more diversified combined company expanding upon Cub's existing assets including the addition of 1,162,856 gross acres of land in Turkey which is highly prospective for both conventional and unconventional resources which compliments Cub's existing land position of 244,000 gross acres in two productive Ukrainian basins.
Cub's producing Ukraine assets, current production net to Cub is approximately 1,550 barrels of oil per day, will now be underpinned by a larger portfolio of exploration opportunities and a significant potential shale oil resource play.
Turkey is a natural extension into a neighboring country with a history of oil and gas production and the necessary infrastructure in place to support ongoing exploration and development activities.
After the acquisition, Cub will own an interest in and jointly operate 11 licenses in four primary project areas in Turkey, Bismil, Sinan, Antep and Besni.
Cub is an upstream oil and gas company with 180,000 net acres in twelve exploration and production licences within the two major producing basins of Ukraine.
On Friday, Cub rose 8.7% and was trading at $0.25 a share. The company had a market cap of $60.6 million, based on 242.3 million shares outstanding. The 52-week high and low was $0.47 and $0.205 respectively.