09/29/2013 09:29 EDT | Updated 11/29/2013 05:12 EST

Pacific Rubiales to buy Petrominerales in a $1.6 billion deal

CALGARY - Calgary-based oil and gas company Petrominerales (TSX:PMG) is up for sale in a proposed deal worth roughly $1.6-billion.

Petrominerales, which operates in Latin America, issued a news release Sunday that Pacific Rubiales Energy Corp. (TSX: PRE) intends to acquire all of its shares.

Petrominerales shareholders would be paid $11.00 per share plus they'll get one share of a new Brazil-focused exploration and production company called ExploreCo that will be based in Calgary, Alberta.

The total transaction value is approximately $1.6 billion, including the assumption of net debt, but excluding ExploreCo's asset value and $100 million of cash.

A shareholders meeting is expected to be held by the end of November where they'll vote on whether or not to accept it.

Petrominerales President and CEO Corey Ruttan says the arrangement is a "culmination of Petrominerales' exploration and development successes in Colombia and Peru."

Petrominerales has been operating in Latin America since 2002.

Pacific Rubiales describes itself as a Canadian firm that is the largest oil and gas exploration and production company in Colombia.