Whitecap Resources Inc. (TSX: T.WCP, Stock Forum) and Invicta Energy Corp. (TSX: V. VCA, Stock Forum) have entered into an arrangement agreement, whereby Whitecap will acquire of all the issued and outstanding common shares of Invicta.
Invicta is a light oil-weighted public energy company with its operations immediately offsetting Whitecap's lands and Viking production in the Lucky Hills area of west central Saskatchewan.
According to the Whitcap Resources press release, under the terms of the transaction, Invicta shareholders will receive, at their election either a 0.05891 of a Whitecap common share or $0.51911 in cash, subject to an aggregate cash maximum of $10.7 million.
Whitecap will also assume the net debt of Invicta, estimated at $17.4 million, after accounting for costs, severance and option proceeds associated with the transaction, as of March 31, 2013.
The $0.51911 per share transaction value represents a 30 percent premium to the closing market price of the Invicta common shares on March 15, 2013.
The total transaction value is approximately $60.2 million, including the assumption of net debt.
The acquired Viking assets are complementary to Whitecap’s existing operations and are immediately offsetting company owned lands in west central Saskatchewan.
Invicta has current production of approximately 500 barrels of oil per day.
On a stand-alone basis, Whitecap is currently producing greater than 17,500 barrels of oil per day.
Following the transaction, Whitecap will continue to expand on its 2013 capital program drilling an additional eight horizontal wells targeting the Viking formation.
Whitecap is an exploration and development company focused on oil and natural gas.
On Monday, Whitecap was trading at $9.49 a share. The company had a market cap of $1.2 billion, based on 129.3 million shares outstanding. The 52-week high and low was $9.62 and $5.79 respectively.