Andes Energia acquires issued share capital of Kilwer S.A

AIM-listed Andes Energia has completed the acquisition of the entire issued share capital of Kilwer S.A., a private oil and gas company with producing and exploration assets in Argentina, from local South American investors.

By MoneyWeek

published 11 March 2013

in Features

The consideration for the acquisition has been satisfied in part by the issue of 60.7m ordinary shares of 10p per share in Andes, to the vendors of Kilwer, the issue of a $10m convertible bond with a term of five years and an interest rate of 11% per annum and the issue of a $25m bond with a term of 10 years and an interest rate of 11% per annum.

The company reported that the transaction was a "significant step" in Andes Energia's path to become a large operating company in terms of reserves and production.

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The deal consolidates Andes Energia as the fourth largest holder of exploration and production acreage in Argentina, with interests in blocks in key hydrocarbon basins, including Neuquen, Golfo San Jorge, Northwest and Nirihuau.

According to an independent report conducted by G&G Energy Consultants, which was engaged by Andes to carry out a technical and economic valuation of Kilwer's assets, Kilwer's net interests comprise a low estimate value of $71.2m, a most probable value of $209.8m and a high estimate value of $355.6m.

Nicols Mallo Huergo, Chairman of Andes Energia, said: "The acquisition of Kilwer consolidates Andes as an operating company, adds new producing fields and brings valuable assets with conventional and unconventional potential that would have a significant positive impact on Andes in the short term."

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