Published: September 3, 2020 |

[Click image to enlarge]

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Canadian oil producer Whitecap Resources has signed a deal to acquire NAL Resources, a subsidiary of insurance and financial services provider Manulife Financial, for approximately $118.59 million.

Under the terms of the agreement, Whitecap will issue 58.3 million shares to Manulife in exchange for all the issued and outstanding shares of NAL Resources.

NAL Resources has oil and gas operations in Alberta and Saskatchewan, Canada. It is currently producing approximately 27,000 barrels of oil equivalent per day (boe/d).

However, NAL Resources’ production is expected to decline in 2021 to reach average 22,000 boe/d.

The deal forms part of Whitecap’s long-term strategy to consolidate assets in its core operating areas.

“The combination between the two companies will position Whitecap to further advance our internal opportunities, as well as our ability to selectively consolidate high-quality assets in our core areas of operation,” Whitecap Resources said in a statement.

In addition to improving balance sheet and financial flexibility, the deal is expected to significantly help Whitecap increase free funds flow profile and long-term sustainability.

Upon completion of the deal, Manulife will have approximately 12.5 percent stake in the combined entity.

“NAL’s production and lands overlap more than 80 percent of Whitecap’s current asset base and provides for meaningful operational synergies and inventory optimization opportunities in west central Alberta, west central Saskatchewan and southeast Saskatchewan, enhancing our exposure to economically compelling plays which we currently operate,” Whitecap Resources said in a press statement.

Planned to be completed in January 2021, the transaction is subject to customary conditions, including the receipt of necessary regulatory approvals.

Source:  NS Energy

To stop by Whitecap’s website, CLICK HERE

To stop by NAL’s website, CLICK HERE

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