Vanoil Energy Ltd. (TSXV:VEL) entered into a non-binding heads of terms to acquire Avana Petroleum Limited for approximately CAD 19 million on November 21, 2012. The transaction is on a cash-free debt-free basis. Under the terms, Vanoil Energy Ltd. will issue common shares of CAD 15 million and a deferred consideration of up to CAD 3.9 million ($4 million) may become payable in future, subject to certain conditions being satisfied in connection with the discovery of hydrocarbon on Avana Petroleum Limited offshore blocks. Post acquisition, Sam Malin, Chief Executive Officer of Avana Petroleum Limited, is proposed to join the Board of Vanoil Energy Ltd. The transaction is subject to obtaining corporate and regulatory authority approvals, entering into legally binding documentation and due diligence.

As of March 15, 2013, Vanoil Energy Ltd. (TSXV:VEL) entered into a warranty and implementation agreement to acquire Avana Petroleum Limited from Sam Malin and other shareholders for CAD 13.1 million. Under the terms, Vanoil Energy Ltd. will issue 0.282 per share or total of 25 million shares and approximately 0.112 warrants per Avana share with total of 5 million Vanoil warrants to be issued. Vanoil will also pay CAD 2.05 million ($2 million) in cash subject to the operator of the Kenyan Asset spudding a second well on Block L9, having drilled a previous well and CAD 2.05 million ($2 million) in cash subject to the operator of the Seychelles Asset spudding a second well on the Seychelles Asset, having drilled a previous well. The transaction recommended by the independent Board of Directors of Avana and supported by Avana's Chief Executive Officer, Sam Malin, with irrevocable undertakings to accept the offer from the shareholders, representing approximately 82% of Avana's issued share capital. The principal shareholders have undertaken to procure that the offer is accepted by certain other shareholders of Avana to ensure that the valid acceptances in respect of at least shareholders of 90% of Avana's issued share capital is received.

Geoff Gouriet, David Ponsford, Mark O'Donnell, Meera Unadkat, Amy Pilmer, Anne Schaffner, Becky Pace and Claudine Raffrey of Lawrence Graham LLP acted as legal advisor to Vanoil Energy Ltd. Ian Binnie and Jack Shepherd of Nabarro LLP acted as legal advisors to Avana Petroleum. Richard Vanderplank of Cains Advocates Limited acted as legal advisor for Vanoil Energy Ltd. Stephen Bullock of Crowe Clark Whitehill LLP, Corporate Finance Arm acted as financial advisor for Vanoil Energy Ltd. The currency conversions were made using website www.onada.com. on March 15, 2013.

Vanoil Energy Ltd. (TSXV:VEL) completed the acquisition of Avana Petroleum Limited on March 21, 2013.