Canada’s Pengrowth Energy is to acquire compatriot NAL Energy Corporation in a $1.9 billion deal to expand its light oil portfolio.
Toronto and New York-listed Pengrowth Energy is offering
0.86 shares for every NAL share under the deal, meaning NAL shareholders will
own 26% of the newly combined outfit.
The deal is expected to close at the end of May after
shareholders of both companies vote on the transaction.
Pengrowth chief executive Derek Evans said the tie-up would enhance
the company’s cash flow base and augment its light oil drilling inventory by
adding 28,200 barrels of oil equivalent per day in output.
He said the larger company would be better equipped to fund
key projects such as the Lindbergh steam-assisted gravity drainage oil sands project, and to exploit development
opportunities in the Swan Hills trend and the central Alberta Cardium play.
The two players will have a combined production of more
than 100,000 barrels of oil equivalent per day and 434 million barrels of oil
equivalent per day in proven and probable reserves.