Whitecap Resources Inc. (TO: WCP) has completed the acquisition of a Cardium light oil property and a working interest consolidation of its Eagle Lake Viking unit for total consideration of $90 million, the company announced Oct. 28.
The Cardium acquisition adds about 920 barrels of oil per day (BOE/d) with 70% oil and NGLs of high netback, operated production with a base production decline of 22%. It includes strategic facilities at Whitecap's existing Ferrier and Garrington areas.
The Viking acquisition adds about100 BOE/d, 95% oil and NGLs, of high netback production with a low base production decline of 20% in Whitecap's operated Eagle Lake Viking unit, increasing Whitecap’s working interest to 88.1%.
Acquiring assets in its core areas and increasing its working interest in existing properties allows the company to remain highly focused and continues to strengthen the sustainability of our dividend-growth strategy.
The majority of acquired production is Cardium light oil with associated natural gas. The Cardium acquisition includes a gathering system, multiple oil satellites, gas conservation and a main oil battery. Over 90% of the producing horizontals have been on production for more than two years which results in an attractive 22% base production decline profile. Whitecap has made significant technology gains in the Garrington play using optimized stimulations and extended reach horizontal wellbores that will be applied to the acquired assets.
In connection with the acquisitions, Whitecap entered into a bought deal equity financing of $65 million.
National Bank Financial Inc. and GMP Securities LP co-led the syndicate of underwriters TD Securities Inc., Dundee Securities Ltd., FirstEnergy Capital Corp., Macquarie Capital Markets Canada Ltd., Scotia Capital Inc., RBC Capital Markets, CIBC World Markets Inc., Raymond James Ltd., and Peters & Co. Ltd. The underwriters have agreed to purchase for resale to the public, on a bought deal basis, some 5.4 million shares at $12 per common share. All members of the Whitecap management team intend to participate in the financing. Proceeds will be used to repay a portion of bank debt which was incurred to fund the acquisitions.
Completion of the financing is subject to certain conditions including the receipt of all necessary regulatory approvals, including the approval of the Toronto Stock Exchange. The common shares issuable pursuant to the financing will be offered in each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba and Ontario by way of a short form prospectus and in such other jurisdictions as agreed to by the company and the Underwriters. Closing of the financing is expected to occur on or about Nov. 13.
This press release is not an offer of the securities for sale in the U.S. The securities have not been registered under the U.S. Securities Act and may not be offered or sold in the U.S. absent registration or an exemption from registration.
Whitecap Resources Inc. engages in the acquisition, development, optimization, and production of crude oil and natural gas in western Canada. The company is headquartered in Calgary.