Celtic Exploration To XOM
Celtic shareholders will receive $24.50 per share and 0.5 shares of a newly-created company, Spinco Ltd., for each of their Celtic common shares
Shareholders for the Calgary-based independent producer Celtic Exploration Ltd. (Toronto: CLT) have approved the sale of the company to a Canadian subsidiary of ExxonMobil (NYSE: XOM) for $C3.1 billion.
Under the terms of the deal, which was announced in October, Celtic shareholders will receive $24.50 per share and 0.5 shares of a newly-created company, Spinco Ltd., for each of their Celtic common shares. The assets assigned to Spinco include acreage in the Inga area in British Columbia, the Grande Cache area in Alberta and interests in oil and gas properties located in Karr, Alberta.
The cash portion of the transaction represents a premium of 35% over Celtic’s closing share price on the Toronto Stock Exchange of C$18.12 on Oct. 16 and a 34% premium over its average trading price for the previous 30 days.
Celtic shareholders also approved the private placement of up to six million common shares in Kelt Exploration Ltd, a spinoff company, about $C13.9 million.
Kelt will hold gas and oil assets near Grande Cache, Alta., and Inga, B.C., producing 3,300 barrels of oil equivalent (BOE) per day, about 90% of which is natural gas, from about 20,000 net hectares of land.
The deal provides ExxonMobil Canada with 545,000 net acres in the liquids-rich Montney shale, 104,000 net acres in the Duvernay shale and additional acreage in other areas of Alberta.
Current production of the acreage to be acquired is 72 million cubic feet (MMcf) per day of natural gas and 4,000 barrels per day of oil, condensate and natural gas liquids. The assets were estimated by Calgary-based Celtic Exploration at Dec. 31, 2011 to include an estimated 128 million oil equivalent barrels of proved plus probable reserves, of which 76% of which are natural gas.
“This acquisition will add significant liquids-rich resources to our existing North American unconventional portfolio,” said Andrew Barry, president of ExxonMobil Canada. “Our financial and technical strength will enable us to maximize resource value by leveraging the experience of ExxonMobil subsidiary XTO Energy, a leading U.S. oil and natural gas producer which has expertise in developing tight gas, shale oil and gas and coal bed methane.”
Celtic management announced that it expects Kelt will be a new publicly-listed independent oil and gas exploration and production company led by Celtic’s current management team, including David J. Wilson and Sadiq H. Lalani. Kelt expects to be a growth oriented company with initial production of approximately 3,300 BOE per day and an initial land position consisting of approximately 53,730 acres in Grande Cache, Alberta; Inga, British Columbia and Karr, Alberta.