(Corrects deal value in paragraph 8 to C$728 million from C$563.2 million to fix a calculation error and reflect C$24 million in cash)
Nov 13 (Reuters) - Canada's PrairieSky Royalty Ltd, which was spun off from EnCana Corp earlier this year, said it would buy peer Range Royalty Ltd Partnership in a deal worth C$699 million to gain exposure to the Viking light oil field in Saskatchewan.
Both companies own properties in Western Canada and collect royalties from oil companies operating on those properties.
PrairieSky also said it intends to increase its annual dividend to C$1.30 per share from C$1.27 per share, once the deal is completed.
The Viking field was expected to "provide strong oil production growth in the coming years", Chief Executive Andrew Phillips said in a statement on Thursday.
Privately held Range holds about 3,000 barrels of oil equivalent per day of royalty production and 3.5 million acres of royalty lands.
The deal will take PrairieSky's royalty acreage position to 9.3 million acres.
Range unitholders will get 0.8 PrairieSky share for each unit they hold. PrairieSky said it would issue about 19.33 million shares on completion of the deal.
Based on Wednesday's close of C$36.42 on the Toronto Stock Exchange, the deal would be worth about C$728 million, including C$24 million in cash.
The deal works out to C$699 million, based on the 20-day volume-weighted average trading price of PrairieSky, the company said. (Reporting by Swetha Gopinath in Bangalore; Editing by Savio D'Souza)