Torc Oil to buy Vero Energy; list on TSX
(Reuters) - Canada's Vero Energy Inc VRO.TO said privately held Torc Oil and Gas Ltd will buy it for C$147 million ($150.6 million), a premium of 32 percent, to boost its presence in light oil assets in the Cardium area.
The new company, which will be known as Torc Oil and Gas Ltd, will be led by the existing management team at Torc. It intends to list on the Toronto Stock Exchange under the ticker "TOG."
The deal is the latest in a string of light-oil asset buyouts as an increasing number of North American energy companies shift toward oil and liquids-rich gas projects to fend off weak natural gas prices.
Light-oil output had been waning steadily for more than a decade as fields matured and the Alberta oil sands played an increasingly dominant role in Canadian energy production. But a new boom in light oil from shale and other tight rock formations is expected to boost output in Canada.
Vero, which explores and produces natural gas, natural gas liquids and oil in Western Canada, said the new company expects to exit the year with a production rate of more than 3,900 barrels of oil equivalent per day.
"Vero's light oil Cardium asset base significantly complements our existing Cardium portfolio, ... and accelerates our Cardium production growth phase," said Torc Chief Executive Brett Herman.
Torc's offer of C$3.00 represents a 32 percent premium to Vero's Wednesday close on the Toronto Stock Exchange. Vero's shares rose as much as 20 percent to C$2.73 on Thursday.
Torc, which operates in the Cardium area and in the southern Alberta Bakken oil field, will assume Vero's net debt of C$30 million. The companies said they would raise the bought-deal financing to C$120.1 million from C$100 million announced earlier in the day. Continued...