Pengrowth to buy NAL Energy for C$1.3 billion, boosts light oil assets
(Reuters) - Oil and gas producer Pengrowth Energy Corp (PGF.TO: Quote) will buy NAL Energy Corp NAE.TO for about C$1.30 billion ($1.30 billion) in stock to boost its light oil properties in western Canada.
Pengrowth, which has been focusing on developing oil and liquids-rich assets, will now have access to more than 730 locations across Swan Hills, the central Alberta Cardium and southeast Saskatchewan.
"The larger inventory of high netback light oil opportunities of the combined asset base enables us to high grade our investment opportunities...," Chief Executive Derek Evans said in a statement on Friday.
Pengrowth, which would acquire two new light-oil plays in Alberta and Saskatchewan from NAL, said the combined entity would produce about 100,000 barrels of oil equivalent a day.
The deal is the latest in a string of light-oil asset buyouts.
In December, Whitecap Resources Inc (WCP.TO: Quote) said it will buy Compass Petroleum Ltd to boost its light oil assets. Crescent Point Energy (CPG.TO: Quote), in January, said it would acquire Wild Stream Exploration to add assets in the oil-rich southwest Saskatchewan.
"NAL is about 50 percent oil and 50 percent gas. Natural gas assets have very low value these days, so I think it is a good price," said analyst Gordon Currie of Salman Partners.
Pengrowth said it was paying NAL about C$67,000 per flowing boe/d of production.
Pengrowth expects the deal to also strengthen its ability to fund the Lindbergh SAGD oil sands project, which is estimated to contain 783 million barrels of bitumen. Continued...