UPDATE 1-Three small Canadian oil companies agree to merge

Thu Dec 20, 2012 1:11pm EST
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* Share-exchange aimed at boosting market value

* Focus to be on light oil in Alberta

* AvenEx shares drop, Pace and Charger gain

* Dividends to paid monthly

By Jeffrey Jones

CALGARY, Alberta, Dec 20 (Reuters) - A trio of small oil and gas companies said on Thursday they have agreed to combine to form a mid-sized Canadian producer, hoping a focus on light crude and monthly dividend policy will generate more value for investors than they were garnering individually.

Pace Oil and Gas Ltd, AvenEx Energy Corp and Charger Energy Corp said they would offer new shares in a combined operation known as Spyglass Resources Corp that will produce about 18,000 barrels of oil equivalent a day in various regions of Alberta.

Based on the values of the companies' shares as spelled out in the agreement, the combined operation would have a market capitalization of about C$425 million ($430 million).

It will be led by former Provident Energy executives, Tom Buchanan as chief executive and Dan O'Byrne as president, the companies said.   Continued...