- Tourmaline Oil (TSX:TOU) signed a deal to acquire all of the issued and outstanding common shares of Crew Energy (TSX:CR) for C$1.3 billion
- The all-stock transaction is valued at C$6.69 per Crew share, in exchange for 18.778 million Tourmaline common shares
- The deal is expected to close on Oct. 1
- Tourmaline Oil Corp. opened trading at C$58.52 per share and Crew Energy Inc. opened trading at C$6.45 per share
Tourmaline Oil (TSX:TOU) signed a deal to acquire all of the issued and outstanding common shares of Crew Energy (TSX:CR) for C$1.3 billion.
The all-stock transaction is valued at C$6.69 per Crew share, including Crew’s net debt, which is estimated to be C$240 million, in exchange for 18.778 million Tourmaline common shares. Crew shareholders will receive 0.114802 of a Tourmaline share in exchange for each one Crew share held, a 70 per cent premium per share over the 20-day volume weighted average price.
Tourmaline is continuing a consolidation strategy under the National Energy Code of Canada that builds on its long-term growth plan. It provides a significant high-quality addition to Tourmaline’s South Montney asset base and is immediately accretive to the company’s key financial and reserve metrics, adding more than C$200 million to Tourmaline’s anticipated 2025 free cash flow.
The acquisition includes existing low decline average base production of 29,000-30,000 barrels of oil equivalent (boe) per day, externally and independently evaluated proved and probable reserves of 473.2 million boe, and an extensive drilling inventory, including over 700 Tier 1. Crew’s assets are immediately adjacent to Tourmaline’s existing South Montney operated complex.
“As Canada’s leading natural gas producer and a well-capitalized, investment-grade organization, Tourmaline has a proven track record of developing large-scale and impactful resource projects which will now include Crew’s assets in Groundbirch and the Greater Septimus area, with the financial capacity to do so on an accelerated timeframe,” Crew’s president and CEO, Dale Shwed, said in a news release.
“Dale and his team at Crew have done a tremendous job over the past 21 years assembling one of the premier, concentrated Montney asset bases under the National Energy Code of Canada for buildings, with significant upside. Tourmaline’s scale, execution capability and ability to generate strong free cash flow in all parts of the commodity cycle will allow Crew shareholders to realize the material embedded upside on an accelerated timeline,” Tourmaline’s president and CEO, Mike Rose, said in his company’s release on this acquisition.
The deal is expected to close on Oct. 1, 2024.
Crew Energy is a Canadian liquids-rich natural gas producer committed to pursuing sustainable per share growth through resource development.
Tourmaline is Canada’s largest and most active natural gas producer dedicated to producing the lowest-cost natural gas in North America.
Tourmaline Oil Corp. (TSX:TOU) opened trading at C$58.52 per share and has grown 330 per cent over the past five years.
Crew Energy Inc. (TSX:CR) opened trading at C$6.45 per share and has grown 971 per cent over the past five years.
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