Whitecap Resources and Veren Inc. will create the largest light oil and condensate producer in the Alberta Montney and Kaybob Duvernay in an all-share combination valued at CA$15 billion (US$10.43 billion). (Source: Whitecap Resources, Veren)
Calgary, Alberta-based Whitecap Resources and Veren Inc. have agreed to combine businesses in an all-share transaction valued at CA$15 billion (US$10.43 billion), the companies said March 10.
Whitecap and Veren plan to create a light oil and condensate producer with concentrated assets in the Alberta Montney and Kaybob Duvernay across 1.5 million acres with more than 4,800 potential drilling sites.
Pro forma, the combined company would average 370,000 boe/d (63% liquids)— with approximately 220,000 boe/d of unconventional light oil from the Alberta Montney and Duvernay , the companies said.
The merged company’s enterprise value would be CA$15 billion, partially based on WTI prices of US$70/bbl. The company would substantial overlap in both unconventional and conventional assets in the Western Canadian Sedimentary Basin, with “significant” natural gas growth potential, the companies said.
Whitecap and Veren expect the merger to have anticipated annual synergies of over CA$200 million (US$140 million).
“We are excited to bring together two exceptionally strong asset bases to create one world-class energy producer with one of the deepest inventory growth sets of both liquids-rich Montney and Duvernay opportunities, along with conventional light oil opportunities in some of the most profitable plays in the Western Canadian basin,” said Grant Fagerheim, Whitecap’s president and CEO.
Under the agreement, Veren shareholders will receive 1.05 common shares of Whitecap for each Veren common share held.
The combined company will be led by Whitecap's existing management team under the Whitecap name with four Veren directors to join the Whitecap’s board, including Craig Bryksa, the current president and CEO of Veren.
The transaction is expected to close before May 30.
National Bank Financial Inc. and TD Securities acted as financial advisers to Whitecap. Burnet, Duckworth & Palmer LLP is acting as Whitecap's legal advisor for the transaction.
BMO Capital Markets is acting as financial adviser to Veren, and Scotiabank is acting as financial adviser to the special committee of Veren. Norton Rose Fulbright Canada LLP is acting as Veren's legal advisor for the transaction and Blake, Cassels & Graydon LLP is acting as legal advisor to the special committee.
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