Vallares merges with Genel Energy - Insider Stories

Just over 2 months after raising more than US$2.0 billion to invest in promising oil and gas projects in developing markets, Vallares Plc today announces that it plans to merge with Genel Energy International Ltd, the largest oil producer in the Kurdistan Region of Iraq.

Genel has stakes in two world-scale producing oil fields, a major gas condensate discovery and significant exploration acreage, all in the Kurdistan Region of Iraq.
The merger will be achieved through an all-share reverse-takeover in which Vallares will issue new shares worth US$2.1 billion at a price of £10 a share to acquire 100%of Genel, giving Vallares and Genel's current owners equal stakes in the combined business.

The transaction is subject to the approval of the Kurdistan Regional Government which is expected to be given later this month.
The newly enlarged company, to be renamed Genel Energy Plc, intends to publish a prospectus in October in order to get the consideration shares admitted to the standard listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities.

Vallares shares will be suspended from trading in the meantime. Tony Hayward will be Chief Executive Officer and Julian Metherell will be Chief Financial Officer. Both will sit on the Board. Nathaniel Rothschild will be a Non-Executive Director.
Mehmet Karamehmet, Genel's current majority owner with a stake of 56.18%, will nominate his daughter, Gulsun Nazli Karamehmet Williams, as a Non-Executive Director. Mehmet Sepil, who has 29.06%, and is currently Chief Executive of Genel will become President.

Murat Yazici will be Mehmet Sepil's nominee to the Board. Mehmet Karamehmet and Mehmet Sepil have committed to retain their interests in the newly enlarged company for one and two years respectively.
"Genel Energy Plc will have a majority of independent directors and is expected to be fully compliant with UK corporate governance rules from closing. Our aim is to achieve a premium listing early in 2012," said Rodney Chase, Non-Executive Chairman, in an official statement today.

The other Non-Executive Directors include James Leng, Sir Graham Hearne, George Rose and Mark Parris, whose appointment to the Board (which will become effective from the completion of the merger) is also announced today.
A further two Independent Non-Executive Directors are expected to be appointed with effect from the completion of the merger.

"I believe our investors are acquiring a strong existing business with excellent producing assets, a fine team of technical and operating staff already in place, and immense potential for future growth. Most importantly, we are doing so at the attractive entry price of some US$1.50 a barrel," said Tony Hayward.
Genel's biggest producing asset is the Taq Taq field where it has a 44% working interest and is joint operator.

It holds a 25% stake in the smaller Tawke field, near the Turkish border which is operated by DNO. Their proven and probable gross reserves are estimated at 647 million and 286 million boe respectively under the McDaniel & Associates competent persons report to be included in the prospectus to be published in connection with the transaction.