Surge Energy (TSX-V:SGY, StockForum), a Calgary-based oil junior oil exploration firm, announced today that the company had acquired ownership and control of 9.3 million common shares in Longview Oil.
According to the news release, the transaction was carried out at $4.45 per common share and was pursuant to a bought deal secondary offering of common shares put forward by an existing shareholder of Longview on February 28, 2014.
The company's move was intended to build a large, strategic equity position in Longview at a competitive cost base and with the acquisition of the block, Surge will pursue a mutually beneficial business combination, although there is no legal requirement to do so.
Surge's acquisition comes at the end of several months of significant detailed geological, geophysical and engineering technical work relating to the assets of Longview, and an extensive, detailed financial modeling of the possible business combination.
Company officials will monitor Surge's investment in the block utilizing various criteria including the dividend yield of the block as it relates to Surge's current yield.
Surge was in the news recently when the company announced a 59% increase to 2013 year-end 2013 reserves.
Shares bumped 4.39% on the news to $5.95 per share.
Currently there are 179.3m outstanding shares with a market cap of $1.1 billion.