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DNO International plans to make an all-cash offer, through an acquisition entity, to acquire Calgary-based Calvalley Petroleum Inc. at a price of CAD 2.30 ($2.26) per Class A common share.
The company’s offer represents a premium of approximately 60% to the CAD 1.43 ($1.43) closing price of Calvalley shares on the Toronto Stock Exchange on July 4 and approximately 55% to the volume weighted average trading price of Calvalley's Shares on the TSX for the past 30 trading days. The proposed transaction represents a market capitalization value of approximately CAD 215 million ($211 million).
“This offer provides Calvalley shareholders with significant, immediate and certain value for the company’s existing assets, as well as recognizing its future growth potential,” said Bijan Mossavar-Rahmani, the company’s executive chairman.
“For DNO International, this transaction is complementary to our existing Yemen asset base and fits well with our strategy of continuing to build a balanced portfolio of production, development and exploration assets in the Middle East and North Africa,” said Mossavar-Rahmani. “We believe the combination of Calvalley's portfolio and DNO International's operational capabilities and strong balance sheet position us to enhance value in Yemen through increased production and reserves.”
Calvalley's principal assets and operations relate to its 50% working interest in the production-sharing agreement for Block 9, which consists of an area of 2,234 sq km (862 sq miles) in the Sayun-Masila basin in the Republic of Yemen.
Calvalley also owns a 100% working interest in a production-sharing contract in the Republic of Ethiopia for the Metema and Gimbi blocks covering a total area of 46,470 sq km (17,492 sq miles).