Sinopec Announcement

(chinadaily.com.cn)
Updated: 2009-06-24 17:53

SINOPEC INTERNATIONAL PETROLEUM EXPLORATION AND PRODUCTION CORPORATION ANNOUNCES C$52.80 PER SHARE CASH OFFER TO ACQUIRE ADDAX PETROLEUM CORPORATION

BEIJING, THE PEOPLE'S REPUBLIC OF CHINA, 24 JUNE 2009: Sinopec International Petroleum Exploration and Production Corporation (SIPC) announced Wednesday that it has entered into a definitive agreement (the Acquisition Agreement) with Addax Petroleum Corporation (Addax Petroleum) pursuant to which SIPC will make an offer to acquire all the outstanding common shares of Addax Petroleum (on a fully diluted basis) by way of a negotiated take-over bid (the Offer) for C$52.80 per share in cash.

SIPC is a wholly owned subsidiary of China Petrochemical Corporation (Sinopec Group) and undertakes overseas investments and operations in the upstream oil and gas sector. Sinopec Group is China's largest producer and supplier of oil products and major petrochemical products.

The Acquisition Agreement has received unanimous support from the Board of Directors of Addax Petroleum. Formal documentation relating to the take-over bid is expected to be mailed by SIPC in early July 2009. In connection with the Offer, AOG Holdings B.V., Addax Petroleum's largest shareholder, and Jean Claude Gandur, President and Chief Executive Officer of Addax Petroleum, have each entered into lock-up agreements with SIPC pursuant to which they have agreed to tender all of their Addax Petroleum shares to the Offer. In addition, the senior management and the directors of Addax Petroleum have agreed to do the same. Completion of the Offer is subject to certain governmental approvals but is not conditional on financing.

The acquisition of Addax Petroleum is a transformational transaction, which SIPC believes will further enable it to achieve its strategic objective to build a stronger presence and operations in West Africa and Iraq, accelerating its international growth strategy as well as optimizing its offshore oil and gas asset portfolio. According to Addax Petroleum's publicly disclosed records, Addax Petroleum had 536 million barrels of proved and probable oil reserves as at 31 December 2008 and average production of approximately 140,000 barrels of oil per day (equivalent to 7 million tons per year) in 2008. In addition, Addax Petroleum's exploration potential, particularly in offshore deepwater exploration projects, will provide a strong platform for SIPC's ongoing growth and development.

SIPC is committed to corporate social responsibility. Addax Petroleum's existing management and employees have demonstrated their exceptional quality and skill in developing Addax Petroleum, and SIPC plans to retain them all. Furthermore, SIPC intends to build on Addax Petroleum's success and help create jobs and help contribute to the local economic development, while also fostering greater international career opportunities for SIPC staff.

Credit Suisse is acting as exclusive financial advisor to SIPC, and Vinson & Elkins LLP and Stikeman Elliot LLP are acting as legal counsel to SIPC.

For further information, please contact Sinopec International Petroleum Exploration and Production Corporation: Mr. Xianliang Geng, Email: xlgeng@sipc.cn.