Pengrowth Energy, NAL Conclude Merger
Bought company with more than 730 locations across Swan Hills trend, centrall AB Cardium and SE SK, gaining 28,200 BOE/d 106.5 MMBOE 2p.
Pengrowth Energy Corp., Calgary, (Toronto: PGF, NYSE: PGH) has closed its purchase of NAL Energy Corp., Calgary, (Toronto: NAE) for C$1.6 billion.
Pengrowth issued 0.86 share per NAL share. The deal values NAL’s production at C$67,000 per flowing barrel equivalent and proved and probable reserves at C$18.20 per barrel equivalent.
The deal provides Pengrowth with exposure to leading western Canadian light oil plays with an inventory of more than 730 locations across the Swan Hills trend, the central Alberta Cardium and southeast Saskatchewan.
Production is approximately 28,200 barrels equivalent per day. Proved and probable reserves as of year-end 2011 were approximately 106.5 million barrels equivalent.
The combined company now has an expanded asset base of high quality conventional and unconventional opportunities with more 100,000 barrels equivalent per day of current production and 434 million barrels equivalent of proved and probable reserves.
Along with NAL’s assets, the deal provide Pengrowth with increased access to capital to fund its Lindbergh SAGD oil sands project. Lindbergh is estimated to contain 783 million barrels of bitumen initially?in?place and the 1,000 barrel-per-day pilot project is currently in the process of injecting steam. Best estimate contingent resources of 296 million barrels at December 31, 2011 represent an increase of 103 million barrels from the prior year.
NAL president and chief executive Andrew Wiswell says, “Bringing Pengrowth and NAL together provide the combined company with greater size, liquidity and access to capital. Part of the attraction to us is Pengrowth's commitment to its dividend paying business model. This transaction provides NAL shareholders with exposure to a larger entity with an excellent portfolio of unbooked light oil development opportunities at Swan Hills and in the central Alberta Cardium play, in addition to a substantial long-term growth asset like the Lindbergh SAGD project.”
Pengrowth president and CEO Derek Evans says, “We are pleased with the successful closing of this strategic transaction and welcome Kel Johnston and Barry Stewart to our board of directors. This transaction makes Pengrowth the second largest intermediate producer in Canada, with a larger inventory of high netback opportunities in light oil.”
Scotiabank was financial advisor to Pengrowth. BMO Capital Markets was financial advisor to NAL.