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SYS-CON MEDIA Authors: Dana Gardner, Elizabeth White, Jnan Dash, Kevin Jackson, Peter Silva

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Stream Oil & Gas to merge into TransAtlantic Petroleum

CALGARY, Sept. 2, 2014 /CNW/ - Stream Oil & Gas Ltd. (TSX-V: SKO) ("Stream" or the "Company") is pleased to announce that it has entered into an Arrangement Agreement (the "Agreement") to merge into TransAtlantic Petroleum Ltd (the "Transaction").  TransAtlantic, listed on TSX and NYSE MKT, is an independent E&P company with ongoing operations in Turkey and Bulgaria; see www.transatlantic.com.  The Transaction is expected to complete in November 2014.

Stream's Board supervised the extended deal process, concluding that the contemplated transaction between Stream and TransAtlantic is beneficial to Stream shareholders, providing the ability to leverage their investment through:

  • The integration of Stream's assets and production, in combination with TransAtlantic's strong performance metrics, which is expected to provide imminent value accretion to Stream's shareholders,
  • TransAtlantic's strong financial position which will provide access to the capital required to further exploit Stream's Albanian assets, including investments in drilling programs analogous to Stream's Albanian peers, to continue increasing production and reserves,
  • TransAtlantic's established business operations which will allow the prompt shift in focus in Albanian assets from exploration & development to production centric, including reducing operating costs,
  • Significant synergies which are expected through the integration of Stream's assets into TransAtlantic's regional business and field operations,
  • TransAtlantic enjoys good market following, as demonstrated through broad analyst coverage and excellent market liquidity.

The Agreement provides that TransAtlantic will exchange 100% of Stream's 66,887,801 common shares for net proceeds to Stream's shareholders of US$41.2 million, payable in TransAtlantic common shares.  On a per share basis, each common share of Stream will be exchanged for 0.05657 common shares of TransAtlantic, which values each common share of Stream at C$0.67 per share based on TransAtlantic's 10-day volume weighted average price ("VWAP") of US$10.89 as of market close on Friday, August 29, 2014.  The C$0.67 per share value represents a 43% premium to Stream's 10-day VWAP of C$0.47 as of market close on Friday, August 29, 2014.  The Agreement provides that C$0.57 per Stream common share, or 0.04812 common shares of TransAtlantic will be issued at closing;  an additional C$0.10 per Stream common share, or 0.00845 common shares of TransAtlantic, will be issued in the event that certain conditions are met by Stream within nine months of the closing date. The Transaction is subject to the completion of due diligence by TransAtlantic, to be finalized by September 26, 2014 as well as the receipt of corporate, government, regulatory and court approvals, among other customary closing conditions.  Having executed the Agreement, it is expected that Stream will be able to recommence the drilling of the Delvina gas field within this month.

The Transaction will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia). The Transaction is conditioned upon, among other things, the affirmative vote of at least 66 2/3% of the Stream common shares that are voted at the shareholder meeting that will be held to consider the Transaction.

Amongst others, the Agreement contains a termination fee of US$2.5 million payable to TransAtlantic if Stream accepts a superior proposal from a third party.  Stream has agreed that it will not solicit or initiate discussions regarding any other business combination or sale of material assets.

Full details of the Transaction will be included in a management information circular to be mailed to Stream shareholders in connection with the shareholder meeting at which the Transaction will be considered. Copies of the Agreement and the management information circular will be available under Stream's profile at www.sedar.com.

The Board of Directors of Stream has unanimously approved the Transaction and recommends that Stream shareholders vote in favor of the Transaction.

Troy Valuations Inc. delivered an opinion to Stream's Board of Directors to the effect that the purchase price for the Stream shares is fair, from a financial point of view, to the Stream shareholders.

Certain of the directors and officers of Stream and certain other shareholders representing approximately 42% of Stream's outstanding common shares, have entered into voting and support agreements pursuant to which they have agreed to vote their Stream shares in favor of the Transaction.

_______________

About Stream Oil & Gas Ltd.

Stream Oil & Gas Ltd. is a Canadian-based emerging oil and gas production, development and exploration company focused on the re-activation and re-development of three oilfields and a gas/condensate field in Albania. The Company's strategy is to use proven technology, incremental and enhanced oil recovery techniques to significantly increase production and reserves.

This news release contains forward-looking statements that address future events and conditions and are subject to various risks and uncertainties in relation to the Company. Specifically, the completion of the Transaction is subject to shareholder, court and regulatory approval, including approval of the TSX Venture Exchange. There is no assurance that the Transaction will be completed. Forward-looking statements are based on the expectations and opinions of the management of the Company on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Stream Oil & Gas Ltd.

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