Crown Point Acquires Apco Austral
OREANDA-NEWS. May 21, 2018. Crown Point Energy Inc. (TSX-V:CWV) ("Crown Point" or the "Company") today provided an update regarding its previously announced acquisition (the "Acquisition") of all of the outstanding shares of Apco Austral S.A. ("Apco Austral") from a subsidiary of Pluspetrol S.A. ("Pluspetrol"). Apco Austral holds a 25.7796% participating interest in the Rio Cullen, Las Violetas and La Angostura hydrocarbon exploitation concessions located in the Tierra del Fuego region of the Austral basin in Southern Argentina (collectively, the "TDF Concessions"). Crown Point currently holds a 25.7804% interest in the TDF Concessions.
As previously disclosed, pursuant to the joint venture agreement governing the TDF Concessions (the "JV Agreement"), Crown Point's and Apco Austral's partners in the TDF Concessions (each a "JV Partner") had a right of first refusal ("ROFR") that allowed them to participate in the Acquisition at a level that was equivalent to their participating interest in the TDF Concessions.
Roch S.A. ("Roch"), one of the JV Partners, disputed the validity of the ROFR notices issued by Pluspetrol to the JV Partners and obtained an injunction (the "Injunction") from an Argentine court prohibiting Pluspetrol from selling the shares of Apco Austral to the Company until Pluspetrol complied with the provisions of the JV Agreement relating to the provision to Roch of complete information in order to allow Roch to evaluate whether or not to exercise its ROFR under the JV Agreement. Roch has also taken steps to commence arbitration proceedings against Pluspetrol under the JV Agreement in order to have an arbitration panel consider and rule on the dispute, although the Company's current understanding is that the arbitration panel would not have the authority to prevent the Acquisition from proceeding.
Pluspetrol successfully challenged the Injunction and the Argentine court ordered that the Injunction be revoked and that Roch's claim be recorded in Apco Austral's share registers to give notice of the claim to potential purchasers (a legal remedy known as "lis pendens" or "Anotaci?n de Litis" in Argentina) (the "Lis Pendens Remedy"). The Lis Pendens Remedy would not have prevented the Acquisition from proceeding. However, Roch immediately appealed this decision to an Argentine Court of Appeal, which had the effect of reinstating the lower court's initial decision (which kept the Injunction in place).
The Company was informed today that the Argentine Court of Appeal has now rejected Roch's appeal, with the result that the lower court's decision to revoke the Injunction and impose the Lis Pendens Remedy has been restored. The Company has been advised that Roch has until June 4, 2018 to appeal this decision to the Supreme Court of Argentina.
In light of this development, the Company is preparing to close the Acquisition and is targeting a closing date by the end of June 2018. In this regard, the Company is in negotiations with Pluspetrol to extend the outside date for closing the Acquisition past the current outside date of May 30, 2018.
Crown Point will provide further updates regarding any material developments relating to the Acquisition as they arise.
About Crown Point
Crown Point Energy Inc. is an international oil and gas exploration and development company headquartered in Calgary, Canada, incorporated in Canada, trading on the TSX Venture Exchange and operating in South America. Crown Point’s exploration and development activities are focused in two of the largest producing basins in Argentina, the Austral basin in the province of Tierra del Fuego and the Neuqu?n basin, in the province of Mendoza. Crown Point has a strategy that focuses on establishing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a basis for future growth.