2009-08-10-2008-08-01

Transaction Type
Announce Date
Post Date
Estimated Price
298MM
Description

To buy co., gaining 277,000 net undeveloped acres, 4,500 BOE/d.

Crew Energy Inc., Calgary, (Toronto: CR) plans to acquire Gentry Resources Ltd., Calgary, (Toronto: GNY) for C$238 million of equity and assumption of C$60 million of debt for a total deal value of approximately C$298 million. Crew will pay 0.22 share per Gentry share, or C$4.19 per Gentry share based on the five-day volume-weighted average price on June 20., a 23% premium. The deal is valued at C$47,600 per flowing and C$19.05 per proved plus probable reserves, according to Crew. Gentry assets include 277,000 net acres of undeveloped land valued at C$59.3 million and current production of approximately 4,500 barrels of oil equivalent per day with near-term production additions expected to increase production to approximately 5,000 barrels per day by closing. On its Princess property in southeastern Alberta, Gentry's contiguous block of land is covered by 486 square miles of 3-D seismic with more than 200 identified drilling locations. Current production on the Princess block is approximately 2,100 barrels per day which is processed through three 100%-owned production facilities. Pro forma, the combined company will have a market capitalization of C$1.4 billion. Production will total 16,500 barrels of oil equivalent per day. Proved plus probable reserves will be 46 million barrels of oil equivalent. Undeveloped net acres will total 614,000. Gentry president and chief executive Hugh Ross says, "We have spent the last five years building an idea into nearly 450 sections of high-working interest, large-reserve-potential oil development acreage in the Princess area. Gentry has transformed the Pekisko play from an exciting exploration discovery to a large low-risk, highly economic development project. Gentry's Pekisko lands bring Crew significant long-term development and reserve growth with more than 200 new drilling locations." He adds, "We believe Crew's assets possess tremendous potential within the Montney trend, exposing Gentry shareholders to one of the most exciting gas plays in North America." Macquarie Capital Markets Canada Ltd. and Cormark Securities Inc. are financial advisors to Crew. GMP Securities Ltd. is financial advisor to Gentry.