Vanoil Agrees Non-Binding Terms to Acquire Avana

Vanoil Agrees Non-Binding Terms to Acquire Avana 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/22/12 -- Vanoil
Energy Ltd. (TSX VENTURE:VEL) ("Vanoil") is pleased to announce that
it has entered into a non-binding heads of terms to potentially
acquire the entire issued and to be issued share capital of Avana
Petroleum Limited ("Avana") from its shareholders (the "Sellers") on
a cash-free debt-free basis (the "Acquisition"). 
Highlights: 


 
--  Non-binding heads of terms agreed for the Acquisition in a cash-free-
    debt-free share transaction 
--  If completed, will deliver a 10% interest in Kenya offshore block L9
    with its partners Ophir and FAR Limited and a 25% interest in Seychelles
    Areas A and B with its partner Afren plc 
--  Supports Vanoil's vision of becoming an emerging leader in East African
    oil and gas exploration 
--  Brings geological and geopolitical diversification to the existing
    onshore Vanoil portfolio 
--  Increases, at completion, Vanoil's net recoverable mean unrisked
    prospective resources from 927 million boe to well over two billion boe 
--  Accelerates Vanoil's exploration program, with two 3D seismic surveys
    and at least four drilling events scheduled for 2013 alone

 
Avana is a privately held Isle of Man company which holds a 10%
working interest in Kenya offshore block L9 with its partners Ophir
Energy plc ("Ophir") and FAR Limited. Block L9 is a 5065 km2 block
located off the coast of Mombasa in the southern waters of Kenya; a
region in which all of the neighbouring acreage is held by Total,
Anadarko, BG, Apache, PTT and their respective partners. Block L9
lies directly to the south of block L8, on which Apache discovered
gas in the Mbawa prospect earlier this year. The results of a 560 km2
3D seismic survey conducted in Q2 2012 suggest that the analogous
Mbawa South prospect extends across the border of block L8 into L9,
and a second 1536 km2 3D seismic survey conducted by Ophir in Q3 2012
illuminated potential oil prospects in a separate fairway spanning
the southern half of block L9 and notably the Simba Graben. Ophir
management presentations in October 2012 note that the estimated
gross recoverable mean unrisked prospective resources on block L9 are
2.7bbbl/11.8 TCF of natural gas and that drilling will
 commence in
2013. 
Avana also holds a 25% working interest in Seychelles Areas A and B
with its partner Afren plc ("Afren"). Areas A and B comprise in
excess of 14,000 km2 in total and are located on the Seychelles
plateau and adjacent zones in the northern waters of the Seychelles
in a region where Amoco previously drilled three wells with
hydrocarbon shows. Avana and its partner have acquired 8,500km of 2D
seismic in the Seychelles (in addition to over 4,000km acquired by
other parties over the blocks) and an extensive new 3D seismic survey
is scheduled to commence in early 2013. Multiple oil seeps have been
observed on Areas A and B, and tar balls of natural origin are
abundant throughout the region. In August 2012, Afren's management
noted that the estimated gross recoverable mean unrisked prospective
resources on Areas A and B are 2.8 billion boe and that drilling is
due to commence in Q4 2013. 
It is proposed that the consideration due to the Sellers will be
CAD$15,000,000 (approx), satisfied by the issue to the Sellers of
common shares in Vanoil. Deferred consideration of up to US$4,000,000
(approx.) may become payable in future, subject to certain conditions
being satisfied in connection with the discovery of hydrocarbon on
Avana's offshore blocks. The Acquisition remains subject to the
satisfaction of a number of conditions, including agreeing the form
of and entering into legally binding documentation, formal acceptance
by the Sellers, satisfactory due diligence being carried out, as well
as the parties obtaining all necessary corporate and regulatory
approvals which may be required.  
It is proposed that Sam Malin, CEO of Avana, join the board of Vanoil
upon completion of the Acquisition. 
The potential Acquisition supports Vanoil's vision of becoming an
emerging leader in East African oil exploration. The underlying
acreage to be acquired through Avana represents a complementary
addition to Vanoil's existing portfolio, bringing geological and
geopolitical diversification. The combined company will hold blocks
in four separate basins, two onshore and two offshore, spanning four
of the most prospective hydrocarbon systems in East Africa. At the
completion of this transaction, Vanoil's net recoverable mean
unrisked prospective resources will more than double, rising from 927
million boe to well over 2 billion boe. An active exploration program
across the portfolio will also yield regular news flow, with two 3D
seismic surveys and at least four drilling events scheduled for 2013
alone. 
Aaron D'Este commented, "The vision of Vanoil's Board of Directors is
to provide a compelling proposition for investors committed to oil
exploration in East Africa. The potential acquisition of Avana
represents a very positive step towards this goal. In a single
transaction, Vanoil could double its net prospective resources,
reduce risk through diversification, and gain a host of well-known
joint venture partners with extensive experience across Africa. We
are also delighted that Sam Malin has agreed to join the Board of
Vanoil upon completion and pleased to note that the share-for-share
nature of the deal preserves our cash position. Overall, we are
confident that the acquisition of Avana will prove to be a
transformational event for Vanoil and its shareholders."  
Sam Malin of Avana commented, "The bringing together of Avana and
Vanoil will create a uniquely focused East African exploration
company with a wealth of regional experience. The transaction, once
complete, will also meet Avana's objective of providing its
shareholders with a listing on an internationally recognised stock
exchange." 
About Vanoil Energy Ltd. 
Based in Vancouver, Canada, Vanoil is an internationally diversified
resource company that has a comprehensive portfolio of oil and gas
assets in the African countries of Kenya and Rwanda. In Kenya, Blocks
3A and 3B were acquired in October 2007 through the signing of a
Production Sharing Contract with the Government of the Republic of
Kenya. Blocks 3A and 3B, which cover 24,912 square kilometers, are
part of the vastly under-explored Cretaceous Central African Rift
Basin System. The Company is preparing to drill in Q1 2013 its first
exploration well on its Kenyan concession. Vanoil's is also the
holder of 1,631 square kilometers of an oil and gas exclusive licence
in the East Kivu Graben in Rwanda at the southern extension of the
Albertine Graben where Heritage and Tullow Oil made their historic
discovery in neighbouring Uganda.  
On behalf of the Board of 
VANOIL ENERGY LTD.  
Aaron D'Este, Chief Executive Officer 
To find out more about Vanoil please visit our website at
www.vanoil.ca. 
Disclaimer for Forward Looking Information 
This news release includes forward looking statements that are
subject to assumptions, risks and uncertainties. Statements in this
news release which are not purely historical are forward looking
statements, including without limitation any statements concerning
the Company's intentions, plans, estimates, beliefs or expectations
regarding the future. Although the Company believes that any such
intentions, plans, estimates, beliefs and expectations in this news
release are reasonable, there can be no assurance that any such
intentio
ns, plans, beliefs and expectations will prove to be
accurate. 
The Company cautions readers that all forward looking statements,
including without limitation those relating to the Company's future
operations and business prospects, are based on assumptions none of
which can be assured, and are subject to certain risks and
uncertainties that could cause actual events or results to differ
materially from those indicated in the forward looking statements.
Readers are advised to rely on their own evaluation of such risks and
uncertainties and should not place undue reliance on forward looking
statements. 
Any forward looking statements are made as of the date of this news
release, and the Company assumes no obligation to update the forward
looking statements, or to update the reasons why actual events or
results could or do differ from those projected in the forward
looking statements. The Company assumes no obligations to update any
forward looking statements, whether as a result of new information,
future events or otherwise. 
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release. 
Contacts:
Vanoil Energy Ltd.
Malcolm Burke
604-689-1515 x 108
mpb@primarycapital.net 
Vanoil Energy Ltd.
Don Padgett
604-689-1515 x 104
dp@primarycapital.net
www.vanoil.ca
 
 
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