October 13, 2009 / 11:42 AM / 9 years ago

UPDATE 2-NAL Oil to buy Breaker Energy for C$310 mln in stock

* To issue 24.7 mln NAL units at C$12.54 apiece

* Deal values Breaker at C$5.96/shr, a 5 pct premium

* Says deal accretive to NAV on per-unit basis in 2010

* NAL CEO says deal offers access to low-risk assets (Adds details, CEO comment, updates share movement)

By Ashutosh Joshi

BANGALORE, Oct 13 (Reuters) - Canada’s NAL Oil & Gas Trust NAE_u.TO on Tuesday agreed to buy junior oil explorer Breaker Energy Ltd WAV.TO for C$310 million in stock to enhance its asset base.

NAL Oil has been looking to boost its portfolio through acquisitions and joint ventures, having finalized three other deals this year.

The company, which has about 60 percent of its reserves in natural gas properties, will be looking to acquire more of oil properties in the near term, Chief Executive Andrew Wiswell told Reuters.

Including the assumption of an estimated C$93 million in Breaker Energy net debt, the deal is valued at C$403 million, the company said.

As part of the deal, NAL Oil will issue about 24.7 million units at C$12.54 apiece, the closing price on Friday.

The deal, expected to close on or about Dec. 10, values Breaker Energy at C$5.96 per share, a premium of about 5 percent over its previous close of C$5.70.

NAL Oil said the acquisition is accretive to production, reserves and net asset value on a per-unit basis in 2010.

Breaker Energy is expected to have an average production of 6,700 barrels of oil equivalent per day for the year.

NAL Oil, which acquired Alberta Clipper and Spearpoint Energy earlier this year, said the Breaker Energy deal gives it access to newer areas and adds oil-focused Irricana property in central Alberta and the Fireweed natural gas property in northeast British Columbia to its fold.

“The assets we are adding are not high-risk exploration in nature. Breaker has identified over 400 locations to access over a period of time and their relative risk profile is low,” CEO Wiswell said.

The company sees capital expenditure of C$160 million to C$170 million for 2010, up from its 2009 estimate of C$130 million to C$135 million, as it expands operations at the newly acquired assets, the CEO said.

Units of NAL Oil were down 6 Canadian cents at C$12.48, while shares of Breaker Energy were up 5 Canadian cents at C$5.75 Tuesday midday on the Toronto Stock Exchange. (Editing by Deepak Kannan)

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