Blackbird Energy Inc. (TSXV: BBI.V) and Pennant Energy Inc. (TSXV: PEN.V) entered into an agreement Feb. 17 in which Blackbird will acquire all outstanding and issued shares of Pennant, Blackbird said Feb. 19.
Pennant shareholders will receive three Blackbird shares for every seven Pennant shares, Blackbird said. The exchange rate is 0.42857 common shares of Blackbird, the company added.
Pennant’s outstanding stock options, warrants and convertible debentures will be adjusted, according to respective terms, under the agreement, the company said.
The agreement and this transaction are part of an arrangement that may make Pennant a wholly-owned subsidiary of Blackbird, the company said. Blackbird would continue to trade on TSX under this arrangement, which is subject to Business Corporations Act of British Columbia, the company noted.
The transaction should provide Pennant shareholders with synergies and value of combining the Bigstone Montney and Mantario interests, the company said. The transaction will also help Blackbird with acquisitions, the company added.
Completion of the transaction may add about 60 barrels of oil equivalent per day (BOE/d) of liquids-rich natural gas and oil for Blackbird, the company said. Blackbird could acquire from Pennant some non-operated oil and natural gas assets in northwestern and central Alberta, and in Saskatchewan, the company said.
"This high quality acquisition will be a stepping stone as Blackbird begins the transition into a junior producer. We believe that the assets of the combined company will garner increased attention and will allow it to begin to unlock hidden value" said Garth Braun, Blackbird’s president and CEO.
Blackbird Energy and Pennant Energy, both based in Vancouver, explore, develop and produce oil and natural gas.
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