Canacol Energy (TSX: T.CNE, Stock Forum) late Monday said it will acquire all of the issued and outstanding shares of Shona Energy (TSX: V.SHO, Stock Forum) in a friendly deal.
Under the terms of the agreement, each Shona common share will be exchanged for C$0.0896 cash and 1.0573 Canacol shares, which represents a value of approximately 56 cents per Shona common share.
Shona has operations in Colombia and Peru, with net proven and probable reserves of approximately 95 billion cubic feet (15.8 million barrels of oil equivalent) and operated production of 14 million cubic feet per day, or 2,300 barrels of oil equivalent per day.
"This transaction strengthens our productive base with stable low cost production and associated cash flows under long term sales contracts, and increases our net 2P reserves and deemed volumes to approximately 32 MMboe of oil and gas. The size of the combined company and its stable production and cash flow streams will facilitate easier access to capital and open up additional consolidation opportunities, particularly in Colombia," said Canacol President and CEO Charle Gamba.