Vermilion to acquire Saskatchewan oil lands for C$400 million
CALGARY, Alberta (Reuters) - Vermilion Energy Inc VET.TO, a Canadian oil and gas producer, said on Tuesday it has agreed to acquire an unnamed private oil company for shares, cash and debt worth C$400 million ($360.8 million) to add new production and reserves in southeastern Saskatchewan's Bakken shale oilfield.
Vermilion said the acquisition will add 3,750 barrels of oil equivalent per day (boepd) through 2014, as well as 57,000 acres of exploration lands and established reserves of 16.5 million barrels of oil equivalent.
The company said it had been looking for opportunities to enter the Williston Basin in Saskatchewan, which contains the northern end of the prolific Bakken and Three Forks shale oilfields that have made North Dakota one of the largest oil-producing areas in the United States.
With its purchase, Vermilion said it now expects 2014 production to average between 47,500 boepd and 48,500 boepd while capital spending will rise by C$35 million to C$590 million this year.
Vermilion will pay the owners of the private firm up to C$172.5 million with a further C$172.5 million to be paid in Vermilion shares priced at C$63.81 each. It expects to issue about 2.7 million shares and assume C$55 million in debt.
The acquisition is expected to close on April 29.
Vermilion shares jumped C$2.54, or 4 percent, to C$65.37 in midafternoon trading on the Toronto Stock Exchange.
($1 = 1.1088 Canadian dollars)
(Reporting by Scott Haggett)
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