- Pipestone Energy (TSX:PIPE) will be acquired by Strathcona Resources, creating a new public Canadian oil and gas company
- The all-share transaction has been equated to an initial enterprise value of C$11.5 billion
- The two companies will be amalgamated to form a new corporation, which will continue as Strathcona Resources Ltd. Canada’s the fifth largest oil producer
- Pipestone Energy Corp. opened trading at C$2.72 per share
Pipestone Energy (TSX:PIPE) will be acquired by Strathcona Resources, creating a new public Canadian oil and gas company.
Pipestone Energy stock was down 6.2 per cent in early Tuesday trading but has risen 9.4 per cent over the past three months.
The all-share transaction has been equated to an initial enterprise value of C$11.5 billion.
The two companies will be amalgamated to form a new corporation, which will continue as Strathcona Resources Ltd. Once the transaction is complete, existing Pipestone shareholders will receive 9.05 per cent of the pro forma equity in Strathcona on a fully diluted basis. Existing Strathcona shareholders and employees will own the rest.
Strathcona will become Canada’s fifth largest oil producer, with current production of 185,000 barrels of oil per day (boe / d) (70 per cent oil / condensate, 78 per cent total liquids), across three core areas: Cold Lake Thermal (55,000 bbls / d), Lloydminster Heavy Oil (55,000 bbls / d) and Montney (75,000 boe / d).
Pipestone’s COO and interim CEO, Dustin Hoffman, called the acquisition a reflection of the successful culmination of growing and delineating its asset base over the past four years.
“This all-share transaction delivers shareholders ongoing exposure to one of the largest, well diversified, upstream producers in North America, which has the capacity to grow its production meaningfully over the next decade,” Hoffman said in a statement.
Strathcona Resources Ltd. is an oil and gas producer with operations focused on thermal oil, enhanced oil recovery and liquids-rich natural gas.
Pipestone Energy Corp. is an oil and gas exploration and production company focused on developing its large contiguous and condensate rich Montney asset base in the Pipestone area near Grande Prairie.
Pipestone Energy Corp. opened trading at C$2.72 per share.
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