OREANDA-NEWS. Petrel is pleased to announce that it has agreed to acquire a 20 per cent shareholding in Amira Hydrocarbons Wasit B.V. (Amira), which is the holder of a 25 per cent carried interest in certain oil and gas exploration and production licences in the Wasit Province of Iraq.

 Highlights
 •Strengthens Petrel's position in Iraq, where it has had a presence since 1999.
 •Strategic partnership with Amira Industries N.V. (Amira Industries), Amira parent company, allows Petrel to benefit from Amira Industries' reputation and local capability in Iraq.
 •Equates to a 5 per cent carried interest through to production in exploration and production licences operated by Oryx Petroleum in the Wasit Province of central Iraq.
 •Petrel given a right of first refusal to participate in future exploration and production licences in the Iraqi provinces of Muthanna, Karbala, Babil and Najaf, once secured by Amira Industries.
 •Arman Kayablian, COO of Amira Industries N.V., will join the board of Petrel as a non-executive director.
David Horgan, Managing Director of Petrel, commented:
 "We are delighted to announce the expansion and diversification of our exploration portfolio with this acquisition. Petrel has a long-standing interest in Iraq. Following the recent farm out of our Irish acreage, the acquisition refocuses our efforts on one of the world's premier hydrocarbon basins. The addition of Amira's assets to our portfolio and the joint venture with the Kayablian family provides our shareholders with greater exposure to the world class hydrocarbon potential in Iraq.

 "We are delighted to welcome Arman to the board and we look forward to working with him."

Lawrence Kayablian, Chairman of Amira Industries, commented:
 "Amira Industries has been at the forefront of licence acquisitions in the Iraqi provinces and was the first oil company to sign oil and gas exploration and production contracts with the governments of Salah ad Din and Wasit. The group has developed local relationships which facilitate timely provincial government approval of its projects. The exposure to Petrel's assets in Ireland and Ghana and the addition of a strong operating team provides Amira Industries with a broader range of exploration opportunities in Iraq and internationally and we look forward to working with Petrel to expand our activities across the region."

The Acquisition
 Petrel, through its wholly owned subsidiary, Petrel Resources (TCI) Limited, has agreed to acquire a 20 per cent shareholding in Amira (the Acquisition) from Amira Petroleum N.V. (Amira Petroleum). Amira is a special purpose vehicle which holds a 25 per cent carried to production interest in an early stage oil opportunity in the large, underexplored and underdeveloped province of Wasit.

 The consideration for the Acquisition comprises an up-front cash payment of USUSD 500,000 and the issue of 18,947,368 shares in Petrel ("Initial Consideration Shares"), representing 19.82 per cent of the enlarged issued share capital of Petrel. The Initial Consideration Shares are locked-in until the spudding of the first conventional oil well in respect of Amira's interest in the Wasit province (the "Spudding Date"). If the Spudding Date has not occurred by 19 August 2018, Petrel may, amongst other things, elect to re-acquire the Initial Consideration Shares for a nominal amount.

 The Acquisition is conditional only on the admission of the Initial Consideration Shares to trading on AIM which is expected to take place on 19 August 2013. Completion of the Acquisition shall take place immediately following Admission.

 Following completion of the Acquisition, a further 21,052,632 shares in Petrel are to be issued in two tranches upon the occurrence of certain events ("Deferred Consideration Shares"). The first tranche of 10,526,316 Deferred Consideration Shares is to be issued upon the Spudding of the first conventional oil well. The second tranche of 10,526,316 Deferred Consideration Shares is to be issued upon notification of a discovery in respect of Amira's interest in the Wasit Province.

 As part of the Acquisition, Arman Kayablian, COO of Amira Industries, will join the board of Petrel as a non-executive director with effect from 19 August 2013. Arman has more than 10 years' experience in project finance and development operations in the energy, utilities and telecommunications industries.

 Under the terms of the Acquisition agreement, Petrel is also given a right of first refusal to participate or acquire an operated interest in any future exploration and production licences that Amira Industries secures in the Iraqi provinces of Muthanna, Karbala, Babil and Najaf, which are currently being pursued by Amira Industries. The terms of Petrel's participation in such licence are subject to agreement between the parties but are likely to be similar to Amira Industries' arrangement with Oryx Petroleum ("Oryx") in respect of the Wasit licences.

Overview of Wasit
 Wasit is a large, relatively underexplored province in east central Iraq close to the giant East Baghdad field. Amira holds a 25 per cent carried interest in three contracts with the Wasit Provincial Government to explore and develop hydrocarbons in the Wasit province: an Asphalt Exploration Contract, Seismic Option Agreement and Risk Exploration Contract ("the Wasit Licence"). The Wasit Government has a back-in right in respect of the licences which, if exercised in full, will reduce Amira's interest to 20 per cent (equivalent to a 4 per cent carried interest for Petrel).

 The operator of the Wasit Licence is Oryx, a Canadian E&P independent listed on the TSX with a market capitalisation of USD 1.4 billion. To date, Oryx has identified five principal leads in the province containing 1,010 million barrels of unrisked prospective oil resources. Amira's interest in the Wasit Licence is carried to production by Oryx and other minority investors.

 Oryx plans to commence a seismic data acquisition program in 2013 and to drill an exploration well in the first half of 2014.

Rationale for the Acquisition
 The Acquisition is in line with Petrel's strategy of reinforcing its existing interests in Iraq. The addition of the shareholding in Amira's assets expands Petrel's exploration programme scheduled for the next 18 months, with the potential to drill one or two additional wells.

 In addition to the Wasit Licence, Amira Industries holds interests in exploration and production licences in other provinces in Iraq. The board of Petrel believes that Amira Industries' reputation and local capability in Iraq mean that it is well positioned to assist Petrel in the development and expansion of its activities across the region.

Application for admission and Total Voting Rights
 Application has been made for the Initial Consideration Shares to be admitted to trading on AIM. Admission is expected to occur on 19 August 2013.

 Following the issue of the Initial Consideration Shares, the Company's enlarged issued share capital will comprise 95,611,992 ordinary shares with one voting right per share. There are no shares held in treasury. This figure of 95,611,992 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.