RE:Market Movers 09:10 AM EDT, 04/05/2021 (MT Newswires) -- Whitecap Resources Inc. (WCP.TO) on Monday said it has agreed to indirectly acquire Kicking Horse Oil & Gas Ltd., a private indirect subsidiary of Quantum Energy Partners, for a total of $300 million.
The consideration is composed of 34.5 million Whitecap common shares and $56 million in cash, along with the assumption of net debt estimated at $54 million as at Feb. 28. The deal is scheduled to close on May 31.
Kicking Horse's assets are mostly a condensate-rich Alberta Montney development at Kakwa with current production of about 8,000 barrels of oil equivalent per day, 32% of which is liquids and 90% of which is condensate. The assets complement Whitecap's existing Montney position at Karr.
Production is expected to be increased to 18,000 to 19,000 boe/d over the next 12 to 15 months with the drilling of eight to 10 wells per year, which is expected to generate about $72 million of free funds flow.
The deal is part of Whitecap's strategy of consolidating high quality assets in its core operating areas to enhance free funds flow and return of capital to shareholders, the company said. Whitecap plans to spend $75 million on the Kicking Horse assets in 2021.
With its plans for the acquired assets, Whitecap now expects 2021 production to average about 108,000 boe/d, 76% liquids, up from 102,000 to 103,000 boe/d, 78% liquids. Capital spending is forecast at $355 million to $375 million, an increase from $280 million to $300 million.