Information Circular relating to the Arrangement - Alvopetro

332 Pages·2013·2.94 MB·English

ARRANGEMENTINVOLVING
PETROMINERALESLTD.
-and-
PACIFICRUBIALESENERGYCORP.
-and-
1774501ALBERTALTD.
NOTICEOFSPECIALMEETINGOFSHAREHOLDERS
NOTICEOFORIGINATINGAPPLICATION
INFORMATIONCIRCULAROFPETROMINERALESLTD.
These materials are important and require immediate attention as they require Shareholders (as defined herein)
to make important decisions. If as a Shareholder you are in doubt as to how to make such decisions, please
contact your financial, legal, tax or other professional advisors. The Board of Directors (as defined herein)
unanimously recommends that Shareholders vote FOR the Arrangement and the other matters to be
considered at theMeeting (asdefined herein). If youhaveanyquestions or need assistancecompleting your
proxy, please contact Kingsdale Shareholder Services Inc. toll free in North America at 1-888-518-6812 or call
[e-mail].
October29,2013
Neither the Toronto Stock Exchange, the TSX Venture Exchange nor any securities regulatory authority has in
any way passed upon the merits of the plan of arrangement described in this Information Circular (as defined
herein).
TABLEOFCONTENTS
Page
LETTERTOSHAREHOLDERS..................................................................................................................................i
NOTICEOFSPECIALMEETINGOFSHAREHOLDERS........................................................................................iii
NOTICEOFORIGINATINGAPPLICATION..............................................................................................................v
INFORMATIONCIRCULAR.......................................................................................................................................1
INFORMATIONFORU.S.SHAREHOLDERS...........................................................................................................1
FORWARD-LOOKINGSTATEMENTS......................................................................................................................3
SUMMARY.................................................................................................................................................................6
GLOSSARYOFTERMS..........................................................................................................................................13
REPORTINGCURRENCIESANDACCOUNTINGPRINCIPLES...........................................................................18
EXCHANGERATES.................................................................................................................................................18
CONVERSIONS.......................................................................................................................................................18
THEARRANGEMENT..............................................................................................................................................19
MATTERSRELATEDTOTHEARRANGEMENT...................................................................................................25
THEARRANGEMENTAGREEMENT......................................................................................................................31
CANADIANSECURITIESLAWSMATTERS...........................................................................................................37
UNITEDSTATESSECURITIESLAWSMATTERS.................................................................................................39
CERTAINCANADIANFEDERALINCOMETAXCONSIDERATIONS...................................................................40
CERTAINUNITEDSTATESFEDERALINCOMETAXCONSIDERATIONS..........................................................47
CERTAINCOLOMBIANINCOMETAXCONSIDERATIONS..................................................................................54
TAXCONSIDERATIONSINOTHERJURISDICTIONS..........................................................................................56
INFORMATIONCONCERNINGPETROMINERALES............................................................................................57
INFORMATIONCONCERNINGPACIFICRUBIALES.............................................................................................57
INFORMATIONCONCERNINGRESOURCECO....................................................................................................57
DISSENTINGSHAREHOLDERRIGHTS.................................................................................................................57
RISKFACTORS.......................................................................................................................................................59
RESOURCECOOPTIONPLAN...............................................................................................................................60
INFORMATIONCONCERNINGTHEMEETING.....................................................................................................64
INDEBTEDNESSOFDIRECTORSANDSENIOROFFICERS...............................................................................68
INTERESTOFINFORMEDPERSONSINMATERIALTRANSACTIONS..............................................................68
LEGALMATTERS....................................................................................................................................................68
OTHERMATTERS...................................................................................................................................................68
ADDITIONALINFORMATION..................................................................................................................................68
AUDITORS...............................................................................................................................................................68
APPROVALOFTHEBOARDOFDIRECTORS......................................................................................................69
APPENDIXA-ARRANGEMENTRESOLUTION..................................................................................................A-1
APPENDIXB-INTERIMORDER..........................................................................................................................B-1
APPENDIXC-ARRANGEMENTAGREEMENT...................................................................................................C-1
APPENDIXD-PLANOFARRANGEMENT..........................................................................................................D-1
APPENDIXE-FAIRNESSOPINIONOFTDSECURITIESINC...........................................................................E-1
APPENDIXF-INFORMATIONCONCERNINGPETROMINERALES..................................................................F-1
APPENDIXG-INFORMATIONCONCERNINGRESOURCECO........................................................................F-1
APPENDIXH-SECTION191OFTHEABCA......................................................................................................H-1
APPENDIXI–RESOURCECOOPTIONPLAN.....................................................................................................I-1
LETTERTOSHAREHOLDERS
October29,2013
DearShareholders:
TheboardofdirectorsofPetromineralesLtd.(the“BoardofDirectors”or“Board”)invitesyoutoattendaspecial
meeting (together with any and all adjournments and postponements thereof, the “Meeting”) of holders
(“Shareholders”)ofcommonshares(“Shares”)ofPetromineralesLtd.(“Petrominerales”)tobeheldat9:00a.m.
(Calgary time) on November27, 2013 in the Royal Room at The Metropolitan Conference Centre, 333 – 4
AvenueS.W.,Calgary,Alberta.
Atthe Meeting,theShareholders willbeaskedtoconsider and,if deemedadvisable,topass aspecialresolution
approving a statutory arrangement (the“Arrangement”) pursuant to Section193 of the Business Corporations
Act (Alberta) whereby Pacific Rubiales Energy Corp. (“Pacific Rubiales”) will acquire all of the issued and
outstanding Shares. Under the Arrangement, each Shareholder (other than a dissenting Shareholder) will: (i)
receive one common share (“ResourceCo Share”) of 1774501 Alberta Ltd. (“ResourceCo”), as a distribution
from Petrominerales, with respect to each Share held; and (ii) then transfer each Share held to Pacific Rubiales
inexchangefor$11.00incash.
ResourceCo is a newly formed company that currently is a wholly-owned subsidiary of Petrominerales. Prior to
theclosingoftheArrangement,approximately$100millionincash(subjecttoadjustment,includingadjustmentto
approximately$91millionintheeventPetrominerales concludesthepurchaseofcertaininterests inBrazilforthe
benefit of ResourceCo) and all of Petrominerales’ assets in Brazil will be transferred, directly or indirectly, to
ResourceCo. The cash to be transferred to ResourceCo is in addition to budgeted capital and operating
expendituresofPetromineralesrespectingtheassetstobetransferredfortheperiodpriortothecompletionofthe
Arrangement of approximately US$18 million. ResourceCo will provide Shareholders with the opportunity to
participate directly in a growth-oriented exploration company to be led by certain members of the current
Petrominerales management team. Petrominerales believes the creation of ResourceCo provides a platform to
unlock the exploration potential of certain assets and undeveloped lands in the Recôncavo, Tucano, Camamu-
Almada and Sergipe-Alagoas basins of Brazil. Petrominerales also believes that ResourceCo will begin with a
number of strengths as a result of a proven management team with a demonstrated track record of building
shareholdervalueinSouthAmerica.
ResourceCo has applied to list the ResourceCo Shares on the facilities of the TSX Venture Exchange (“TSXV”).
Such listing will be subject to ResourceCo fulfilling all of the minimum listing requirements of the TSXV. There
can be no assurance that the ResourceCo Shares will be listed and listing is not a condition to the completion of
the Arrangement. If listing approval is obtained prior to the effective time of the Arrangement (and there can be
no assurance that listing approval will be obtained by such time or at all), trading in the ResourceCo Shares is
expectedtocommenceconcurrentlywiththedelistingoftheSharesfromtheTorontoStockExchange.
The Board of Directors has received an opinion (the“Fairness Opinion”) from TD Securities Inc. dated
September 29, 2013 to the effect that, as at the date of such opinion and subject to the assumptions, limitations
and qualifications contained therein, the consideration to be received by the Shareholders pursuant to the
Arrangementis fair,from afinancialpointof view,tosuchholders. Acopyof the Fairness Opinionis includedas
AppendixEtotheInformationCircular(asdefinedherein)andweurgeyoutoreaditinitsentirety.
After consulting with its financial and legal advisors, and after consideration of, among other things, the
Fairness Opinion, the Board has unanimously determined that the Arrangement is fair to Shareholders,
fromafinancialpointofview,andthattheArrangementisinthebestinterestsofPetrominerales.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ARRANGEMENTRESOLUTION.
-ii-
To be effective, the Arrangement must be approved by a resolution passed at the Meeting by not less than
662/3% of thevotes validlycast. Eachof thedirectors andexecutiveofficers ofPetrominerales, whocollectively
own or exercise control or direction over approximately 3.92%of the outstanding Shares, have entered into
support agreements with Pacific Rubiales agreeing, among other things, to support and vote their Shares in
favouroftheArrangement.
AttheMeeting,Shareholderswillalsobeaskedtoconsider,andifdeemedadvisable,passanordinaryresolution
approving a stock option plan for ResourceCo to be effective upon the completion of the Arrangement. The
completion of the Arrangement is not conditional upon the approval of the resolution respecting the stock option
planforResourceCo.
It is important that your Shares be represented at the Meeting. Whether or not you are able to attend, we urge
you to complete the enclosed form of proxy (on yellow paper) and return it by mail or courier to Computershare
TrustCompanyofCanadaintheenclosedpostageprepaidenvelopeorbyhanddeliverytoComputershareTrust
Company of Canada, Attention: Proxy Dept., 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1, not
later than 48hours (excluding Saturdays, Sundays and statutory holidays in Alberta) prior to the commencement
of the Meeting. Proxies may also be voted by telephone or through the Internet in accordance with the
instructions providedontheform ofproxy.Thetimelimitforthedepositof proxiesmaybe waivedbytheChair of
theMeetinginhisdiscretion,withoutnotice.
Included with this letter, in addition to the form of proxy, is a notice of the Meeting and an information circular
(the“InformationCircular”). TheInformationCircularcontainsadetaileddescriptionoftheArrangement,aswell
as detailed information concerning Petrominerales and ResourceCo. You should consider carefully all of the
information in the Information Circular. If you require assistance, consult your financial, legal, tax or other
professionaladvisors.
Also enclosed with this letter is a letter of transmittal (on blue paper) containing complete instructions on how
registered Shareholders may exchange their Shares. Registered Shareholders will not actually receive the cash
and ResourceCo Shares to which they are entitled under the Arrangement until the Arrangement is completed
and they have returned their properly completed documents, including the letter of transmittal and share
certificatesfortheirShares.
If you are a holder of Shares and have any questions or require more information with regard to voting
your Shares, please contact Petrominerales’ proxy solicitation agent, Kingsdale Shareholder Services
Inc.,by: (i) toll-freetelephonein North America at 1(888) 518-6812,orcollect call at [phone]; or(ii)
[email protected].
OnbehalfofPetrominerales,IwouldliketothankallShareholdersfortheirongoingsupportaswepreparetotake
partinthisimportanttransactionforPetrominerales.
Yoursverytruly,
(signed)“CoreyC.Ruttan”
PresidentandChiefExecutiveOfficer
-iii-
NOTICEOFSPECIALMEETINGOFSHAREHOLDERS
PETROMINERALESLTD.
NOTICE IS HEREBY GIVEN that, pursuant to an order (the“Interim Order”) of the Court of Queen’s Bench of
Alberta (the“Court”) dated October 29, 2013, a special meeting (together with any and all adjournments and
postponements thereof, the“Meeting”) of the holders (the“Shareholders”) of common shares (“Shares”) of
Petrominerales Ltd. (“Petrominerales”) will be held at 9:00a.m. (Calgary time) on November 27, 2013 in the
Royal Room at The Metropolitan Conference Centre, 333 – 4 Avenue S.W., Calgary, Alberta for the following
purposes:
1. to consider and, if deemed advisable, to pass, with or without variation, a special resolution
(the“Arrangement Resolution”), the full text of which is set forth in AppendixA to the accompanying
information circular of Petrominerales (the“Information Circular”), to approve an arrangement
(the“Arrangement”) under Section193 of the Business Corporations Act, R.S.A. 2000, c.B-9
(the“ABCA”) involving Petrominerales, Pacific Rubiales Energy Corp., 1774501 Alberta Ltd.
(“ResourceCo”)andtheShareholders;and
2. to consider and, if deemed advisable, to pass an ordinary resolution approving a stock option plan for
ResourceCo;and
3. to transact such other business, including amendments to the foregoing, as may properly come before
theMeeting.
The board of directors of Petrominerales (the “Board” or “Board of Directors”) has set the close of business on
October 28, 2013 as the record date for determining Shareholders who are entitled to receive notice of, and to
vote at, the Meeting. Only Shareholders whose names have been entered in the register of Shareholders at the
closeofbusinessonthatdateareentitledtoreceivenoticeof,andtovoteat,theMeeting.
The Arrangement is described in the Information Circular, which forms part of this Notice. The full text of the
ArrangementResolutionissetoutinAppendixAtotheInformationCircular.
Pursuant to the Interim Order, registered Shareholders have the right to dissent with respect to the Arrangement
Resolutionand,iftheArrangementbecomeseffective,tobepaidthefairvalueoftheirSharesinaccordancewith
theprovisionsofSection191oftheABCA,asmodifiedbytheInterimOrder. AregisteredShareholderwishingto
exerciseitsrighttodissentwithrespecttotheArrangementmustsendtoPetromineralesawrittenobjectiontothe
ArrangementResolutionandsuchwrittenobjectionmustbereceivedbyPetromineralesc/oitscounselMcCarthy
Tétrault LLP, 3300, 421 –7th Avenue S.W., Calgary, Alberta, T2P 4K9, Attention: Mark Franko, by 5:00p.m.
(Calgary time) on November 25, 2013 (or such other date that is two business days immediately preceding the
date of the Meeting, as it may be adjourned or postponed from time to time). A Shareholder’s right to dissent is
described in more detail in the Information Circular (see“Dissenting Shareholder Rights”) and a copy of the
Interim Order and the text of Section191 of the ABCA are set forth in AppendixB and AppendixH, respectively,
totheInformationCircular.
Failure to strictly comply with the requirements set forth in Section191 of the ABCA, as modified by the
InterimOrder,mayresultinthelossofanyrighttodissent. PersonswhoarebeneficialownersofShares
registered in the name of a broker, custodian, nominee or other intermediarywho wish to dissent should
be aware that only the registered holders of Shares are entitled to dissent. Accordingly, a beneficial
owner of Shares desiring to exercise this right must make arrangements for the Shares beneficially
owned by such Shareholder to be registered in the Shareholder’s name prior to the time the written
objection to the Arrangement Resolution is required to be received by Petrominerales or, alternatively,
make arrangementsfor theregistered holderof such Sharesto dissent on theShareholder’sbehalf. It is
stronglysuggested that anyShareholder wishing to dissent seekindependent legal advice, asthe failure
to complystrictlywith the provisions of the ABCA, as modified bythe Interim Order, mayprejudice such
Shareholder’srighttodissent. Shareholderswhohavevotedinfavourofthe ArrangementResolution,in
personorbyproxy,shallnotbeaccordedtherighttodissent.
-iv-
THEBOARDOFDIRECTORSUNANIMOUSLYRECOMMENDSTHATPETROMINERALES
SHAREHOLDERSVOTEFORTHEARRANGEMENTRESOLUTION
Whether or not you intend to attend the Meeting, you are requested to complete, sign, date and return the
enclosed form of proxy either by mail or courier to Computershare Trust Company of Canada in the enclosed
postage prepaid envelope or by hand delivery to Computershare Trust Company of Canada, Attention: Proxy
Dept., 8thFloor, 100 University Avenue, Toronto, Ontario, M5J 2Y1, no later than 48hours (excluding Saturdays,
SundaysandstatutoryholidaysinAlberta)priortothecommencementoftheMeeting. Proxiesmayalsobevoted
bytelephone or through the Internet in accordance with the instructions provided on the form of proxy. The time
limit for the deposit of proxies may be waived or extended by the Chair of the Meeting in his discretion, without
notice.
Registered Shareholders are also requested to complete, sign, date and return by mail, hand or courier
the enclosed form of letter of transmittal, together with the certificate(s) representing your Shares, to the
depositary for the Arrangement, Equity Financial Trust Company, 200 University Avenue, Suite 300,
Toronto,Ontario,M5H4H1,Attention:CorporateActions.
If you are a Shareholder and have any questions or require more information with regard to voting your Shares,
please contact Petrominerales’ proxy solicitation agent, Kingsdale Shareholder Services Inc., by: (i) toll-free
telephone in North America at 1 [phone], or collect call at [phone]; or (ii) email at
[email protected].
DATEDatCalgary,Alberta,this29thdayofOctober,2013.
BYORDEROFTHEBOARDOFDIRECTORSOF
PETROMINERALESLTD.
(signed)“CoreyC.Ruttan”
PresidentandChiefExecutiveOfficer
-v-
INTHECOURTOFQUEEN’SBENCHOFALBERTA
JUDICIALDISTRICTOFCALGARY
INTHEMATTEROFSECTION193OFTHEBUSINESSCORPORATIONSACT,
R.S.A.2000,c.B-9ASAMENDED
ANDINTHEMATTEROFAPROPOSEDARRANGEMENTINVOLVING
PETROMINERALESLTD.,PACIFICRUBIALESENERGYCORP.,1774501ALBERTALTD.
AND
THESHAREHOLDERSOFPETROMINERALESLTD.
NOTICEOFORIGINATINGAPPLICATION
NOTICE IS HEREBY GIVEN that an application (the“Application”) has been filed with the Court of Queen’s
Bench of Alberta, Judicial District of Calgary (the“Court”) on behalf of Petrominerales Ltd. (“Petrominerales”)
with respect to a proposed arrangement (the“Arrangement”) under Section193 of the Business Corporations
Act, R.S.A. 2000, c.B-9, as amended (the“ABCA”), involving Petrominerales, Pacific Rubiales Energy Corp.
(“Pacific Rubiales”), 1774501 Alberta Ltd. (“ResourceCo”) and holders of common shares of Petrominerales
(“Shareholders”) (collectively, the“Arrangement Parties”), which Arrangement is described in greater detail in
the information circular of Petrominerales dated October29, 2013 accompanying this Notice of Originating
Application.
AtthehearingoftheApplication,Petromineralesintendstoseek:
(a) anOrderapprovingtheArrangementpursuanttotheprovisionsofSection193oftheABCA;
(b) adeclarationthatthetermsandconditionsoftheArrangementarefairandreasonable,bothprocedurally
andsubstantively,totheShareholdersandanyotheraffectedparties;
(c) adeclarationthattheArrangementwill,uponthefilingoftheArticlesofArrangement,becomeeffectivein
accordancewithitstermsandwillbebindingoneachofthepartiesonandaftertheEffectiveDate;and
(d) such other and further orders, declarations and directions as the Court may deem reasonable and
necessary.
AND NOTICE IS HEREBY GIVEN that the Court has been advised that its order approving the Arrangement, if
granted, will constitute the basis for an exemption from the registration requirements of the United States
Securities Act of 1933, as amended, as provided by Section 3(a)(10) thereof, with respect to the securities to be
issuedpursuanttotheArrangement.
AND NOTICE IS FURTHER GIVEN that the said Application was directed to be heard before a Justice of the
Court of Queen’s Bench of Alberta, Calgary Courts Centre, 601-5thStreet S.W., Calgary, Alberta, T2P5P7, on
the 27th of November, 2013 at 1:30p.m. (Calgary time) or as soon thereafter as counsel may be heard. Any
ShareholderoranyotherinterestedpartydesiringtosupportoropposetheApplication,mayappearatthetimeof
thehearing in person or bycounsel for that purpose. Any Shareholderor anyotherinterested partydesiring
to appear at the hearing is required to file with theCourt of Queen’s Bench of Alberta, Judicial District of
Calgary, and serve upon Petrominerales on or before 9:00a.m. (Calgary time) on November22, 2013, a
noticeofintentiontoappear,includinganaddressforserviceintheProvinceofAlbertatogetherwithany
evidenceormaterialswhicharetobepresentedtotheCourt. ServiceonPetromineralesistobeeffectedby
deliverytothesolicitorsforPetromineralesattheaddressbelow. IfanyShareholderoranyotherinterestedparty
does not attend, either in person or by counsel, at that time, the Court may approve the Arrangement as
presented,ormayapprove itsubjecttosuchterms andconditions as theCourtshalldeem fit,withoutanyfurther
notice.
AND NOTICE IS FURTHER GIVEN that no further notice of the Application will be given by Petrominerales and
that in the event the hearing of the Application is adjourned, only those persons who have appeared before the
CourtforthehearingoftheApplicationshallbeservedwithnoticeoftheadjourneddate.
-vi-
AND NOTICE IS FURTHER GIVEN that the Court, by Order dated October29, 2013 (the“Interim Order”), has
given directions as to the calling and holding of the meeting of Shareholders for the purpose of such holders
votinguponthespecialresolutiontoapprovetheArrangementandcertainother business,allasmoreparticularly
describedintheInformationCircular,andhasdirectedthatregisteredShareholdersshallhavetherighttodissent
with respect to the Arrangement in accordance with the provisions of Section191 of the ABCA, as amended by
theInterimOrder.
AND NOTICE IS FURTHER GIVEN that a copy of the said Application and other documents in the proceedings
will be furnished to any Shareholder or other interested party requesting the same by the undermentioned
solicitorsforPetromineralesuponwrittenrequestdeliveredtosuchsolicitorsasfollows:
McCarthyTétraultLLP
Suite3300,421–7thAvenueS.W.
Calgary,Alberta T2P4K9
Attention: DouglasYoshida
DATEDattheCityofCalgary,intheProvinceofAlberta,this29thdayofOctober,2013.
BY ORDER OF THE BOARD OF DIRECTORS OF
PETROMINERALESLTD.
(signed)“CoreyC.Ruttan”
PresidentandChiefExecutiveOfficer
INFORMATIONCIRCULAR
Introduction
This Information Circular is furnished in connection with the solicitation of proxies by and on behalf of
the management of Petrominerales for use at the Meeting. No person has been authorized to give any
information or make any representation in connection with the Arrangement or any other matters to be
considered at the Meeting other than those contained in this Information Circular and, if given or made,
anysuchinformationorrepresentationmustnotberelieduponashavingbeenauthorized.
All summaries of, and references to, the Arrangement in this Information Circular are qualified in their entirety by
referencetothecompletetextofthePlanofArrangement,acopyof whichisattachedtothisInformationCircular
asAppendixD. YouareurgedtocarefullyreadthefulltextofthePlanofArrangement.
AllcapitalizedtermsusedinthisInformationCircularbutnototherwisedefinedhereinhavethemeaningssetforth
under “Glossary of Terms”. Information contained in this Information Circular is given as at October29, 2013
unless otherwise specifically stated. In this Information Circular, dollar amounts are expressed in Canadian
dollars unless otherwise specified by indicating that amounts are in U.S. dollars (US$) or Colombian pesos
(COL$).
ThisInformationCirculardoesnotconstituteanoffertosell,orasolicitationofanoffertopurchase,thesecurities
to be issued under or in connection with the Arrangement, or the solicitation of a proxy, in any jurisdiction, to or
from any person to whom it is unlawful to make such offer, solicitation of an offer or proxy solicitation in such
jurisdiction. Neither the delivery of this Information Circular nor any distribution of the securities to be issued
under or in connection with the Arrangement will, under any circumstances, create any implication or be treated
as a representation that there has been no change in the information set forth herein since the date of this
InformationCircular.
The information concerning Pacific Rubiales contained in this Information Circular has been provided by Pacific
Rubiales. Although Petrominerales has no knowledge that any statement contained herein taken from, or based
on, such information is untrue or incomplete, Petrominerales assumes no responsibility for the accuracy of the
information or for any failure by Pacific Rubiales to disclose events which may have occurred or may affect the
significanceoraccuracyofanysuchinformation,butwhichareunknowntoPetrominerales.
THE SECURITIES TO BE ISSUED PURSUANT TO THE ARRANGEMENT HAVE NOT BEEN APPROVED OR
DISAPPROVED BY ANY CANADIAN SECURITIES REGULATORY AUTHORITY NOR HAS ANY CANADIAN
SECURITIES REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
INFORMATIONCIRCULAR. ANYREPRESENTATIONTOTHECONTRARYISACRIMINALOFFENCE.
INFORMATIONFORU.S.SHAREHOLDERS
The issuance and distribution of the ResourceCo Shares to Shareholders pursuant to the Arrangement has not
been and will not be registered under the U.S.Securities Act or the securities laws of any state of the United
States, and such securities will be issued and distributed in reliance upon the exemption from the registration
requirements of the U.S.Securities Act provided by Section3(a)(10) thereof, on the basis of the approval of the
Court, and similar exemptions under applicable state securities laws. Section3(a)(10) of the U.S.Securities Act
exempts the issuance of anysecurities issued in exchange for one or more bonafide outstanding securities from
the general requirement of registration where the terms and conditions of the issuance and exchange of such
securities have been approved by a court of competent jurisdiction that is expressly authorized by law to grant
such approval, after a hearing upon the fairness of the terms and conditions of such issuance and exchange at
whichallpersonstowhomitisproposedtoissuethesecuritieshavetherighttoappearandreceivetimelynotice
thereof. The Court is authorized to conduct a hearing at which the fairness of the terms and conditions of the
Arrangement will be considered. The Court issued the Interim Order on October 29, 2013 and, subject to the
approval of the Arrangement by the Shareholders, a hearing on the Arrangement will be held on November27,
2013 at 1:30p.m. (Calgary Time) at the Calgary Courts Centre, 601-5thStreet S.W., Calgary, Alberta, Canada.
All Shareholders are entitled to appear and be heard at this hearing. The Final Order will constitute the basis for
the exemption from the registration requirements of the U.S.Securities Act provided by Section3(a)(10) thereof
with respect to the ResourceCo Shares to be issued and distributed to Shareholders pursuant to the
Arrangement. Prior to the hearing on the Final Order, the Court will be informed of this effect of the Final Order.
See“TheArrangement-CourtApproval”.
-2-
This solicitation of proxies is not subject to the requirements of Section14(a) of the U.S.Exchange Act.
Accordingly, the solicitation and transactions contemplated in this Information Circular are made in the United
States for securities of a Canadian issuer in accordance with Canadian corporate laws and Securities Laws, and
this Information Circular has been prepared in accordance with disclosure requirements applicable in Canada.
Shareholders in the United States should be aware that such requirements are different from those of the United
States applicable to registration statements under the U.S.Securities Act and proxy statements under the
U.S.ExchangeAct.
All audited and unaudited financial statements and other financial information included or incorporated by
reference in this Information Circular have been prepared in accordance with IFRS and are subject to Canadian
auditing and auditor independence standards, which differ from generally accepted accounting principles in the
United States (“U.S.GAAP”) and United States auditing and auditor independence standards, respectively, in
certain material respects. Consequently, such financial statements and other financial information are not
comparable in all respects to financial statements and other financial information prepared in accordance with
U.S.GAAP and that are subject to United States auditing and auditor independence standards. Likewise, pro
formainformationconcerningtheassetsofResourceCohasbeenpreparedinaccordancewithIFRSandmaynot
becomparableinallrespectstosimilarinformationforUnitedStatescompanies.
Additionally, oil and gas reserve estimates and other oil and gas information contained or incorporated by
reference in this Information Circular has been prepared in accordance with Canadian disclosure standards,
whichmaynotbecomparableinallrespectstoUnitedStatesdisclosurestandards.
Shareholders should be aware that the acquisition of the ResourceCo Shares pursuant to the
Arrangement described herein may have tax consequences in Canada, the United States and Colombia.
See “Certain Canadian Federal Income Tax Considerations”, “Certain United States Federal Income Tax
Considerations” and "Certain Colombian Income Tax Considerations". Shareholders that are residents
or citizens of Canada, the United States or Colombia should consult their own tax advisors with respect
totheirownparticularcircumstances.
The enforcement by investors of civil liabilities under U.S.Securities Laws may be affected adversely by the fact
that Petrominerales, Pacific Rubiales and ResourceCo are incorporated under the laws of Canada, that the
majority of their officers and directors are, or will be, residents of countries other than the United States, that
certainexpertsnamedinthisInformationCircularareresidentsofcountriesotherthantheUnitedStates,andthat
all or substantial portions of the assets of Petrominerales, Pacific Rubiales, ResourceCo and such other persons
are,or willbe, locatedoutside the United States. As aresult, it maybedifficult or impossiblefor Shareholders in
the United States to effectservice of process within the United States upon Petrominerales, Pacific Rubiales and
ResourceCo and their directors and officers, or to realize against them, upon judgments of courts of the United
States predicated upon civil liabilities under the federal securities laws of the United States or “bluesky” laws of
any state within the United States. In addition, Shareholders in the United States should not assume that the
courts of Canada: (i)would enforce judgments of United States courts obtained in actions against such persons
predicateduponcivilliabilitiesunderthefederalsecuritieslawsoftheUnitedStatesor“bluesky”lawsofanystate
within the United States; or (ii)would enforce, in original actions, liabilities against such persons predicated upon
civil liabilities under the federal securities laws of the United States or “bluesky” laws of any state within the
UnitedStates.
The ResourceCo Shares issuable to Shareholders pursuant to the Arrangement will be freely transferable under
U.S.federalsecuritieslaws,exceptbypersons whoare“affiliates”(assuchterm isdefinedinRule405underthe
U.S.SecuritiesAct)ofResourceCoaftertheEffectiveTimeorwere“affiliates”ofResourceCowithin90daysprior
to the Effective Time. Persons who may be deemed to be “affiliates” of an issuer include individuals or entities
that control, are controlled by, or are under common control with, the issuer, whether through the ownership of
voting securities, bycontract, or otherwise, and generallyinclude executive officers and directors of the issuer as
well as principal shareholders of the issuer. Any resale of such ResourceCo Shares by such an affiliate (or
former affiliate) may be subject to the registration requirements of the U.S.Securities Act, absent an exemption
therefrom. See“UnitedStatesSecuritiesLawMatters”.
THE SECURITIES ISSUABLE PURSUANT TO THE ARRANGEMENT HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES, NOR HAS THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY SUCH STATE REGULATORY