GREY:AVNDF - Post by User
Post by
strzelinon Dec 21, 2012 3:16pm
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Post# 20762580
Merger from the Pace Oil perspective
Merger from the Pace Oil perspective According to Scotia Capital The Deal may not be over. They recommend to hold Pace with the target price of $5.5 which imply propose Spyglass Resources at $4.2
"Given PCE is now in play, we recommend investors
hold the stock as terms of the exchange ratio may change to reflect
better terms or another incoming bidder may surface."
"Transaction Overview
¦ Transaction dilutive to near-term metrics but improves the balance sheet. Based on the
1.3 share exchange ratio (PCE receives 1.3 shares of SGL), we estimate the transaction is
dilutive to production & reserves per share by ~30%-40% and about 15% to cash flow while
debt improves by about 38%. Exhibit 2 shows a detailed transaction summary based on our
estimates on PCE as a stand alone entity and SGL's management estimates (using $86/bbl
Edm Par and $3.30/mcf AECO).
¦ Pro forma Spyglass production. It is of note that SGL's production guidance of 18,000
boe/d is ~8% below pro forma Q3/12 production of 19,565 boe/d. SGL expects to evaluate
and manage its portfolio of assets (including the divestiture of non-core assets) within 3 to 6
months of closing."