Canada’s Whitecap Resources has agreed to acquire rival TORC Oil & Gas in an all-stock transaction valued at approximately $900 million, which also includes TORC’s net debt, estimated at $335 million.
Under the agreement, TORC shareholders will receive 0.57 Whitecap common shares for each of their common shares, with the combined entity to be stewarded by the existing Whitecap executive team.
The transaction has been unanimously approved by the Boards of Directors of both Whitecap and TORC and is expected to close on or before February 25, 2021, subject to customary conditions, including the receipt of necessary regulatory and shareholder approvals.
Whitecap’s President & CEO Grant Fagerheim said the merger creates a leading oil weighted producer in Western Canada with a focused asset base exhibiting lower production declines, high operating netbacks and strong capital efficiencies.
“We are combining two strong Canadian energy producers to form a leading large-cap, light oil company geared towards generating sustainable long-term returns for shareholders while prioritizing responsible Canadian energy development,” Mr Fagerheim said.
“Despite the challenging conditions and significant volatility throughout the year, we have become an even stronger and more resilient energy producer entering 2021 with the combination with TORC as well as the NAL transaction announced on August 31, 2020.
“We would like to thank our employees for their continued exemplary efforts and our shareholders for their ongoing support. We look forward to advancing returns to our shareholders into the future.”
TORC’s President & CEO Brett Herman said the transaction will result in meaningful operational synergies and inventory optimisation opportunities.
“We believe our corporate values are closely aligned with Whitecap’s management team and the announced business combination will create an exceptionally resilient energy producer that is positioned for growth, while delivering a sustainable dividend to shareholders,” he continued.
“In a market environment that is increasingly favouring size and scale, a business combination with Whitecap exposes TORC shareholders to a larger platform while remaining consistent with our existing philosophy of balancing growth with financial discipline along with prudent capital allocation. We are pleased to become shareholders of Whitecap.”