March 8, 2011 / 3:31 PM / in 7 years

UPDATE 1-Whitecap Resources to buy pvt co for C$187 mln

* Deal to boost Whitecap’s presence in Pembina area

* Transaction to be part funded via C$136 mln bought-deal financing

* Deal likely to add to Whitecap’s 2011 cash flow per share (Follows alerts)

March 8 (Reuters) - Canada’s Whitecap Resources Inc said it will buy privately held Spry Energy Ltd for C$187 million to boost its presence in west central Alberta and southeast Saskatchewan.

Whitecap said it will also assume debt and working capital of Spry, estimated at C$36 million as of March 1.

Spry shareholders will receive 1.17647 Whitecap shares or C$8.00 in cash for each share held.

The company said it will raise C$136 million through a bought-deal financing to part fund the acquisition.

Key operations for Spry -- whose current production is about 2,600 barrels of oil equivalent per day -- are in the Pembina area, with majority of its production and reserves focused in the Cardium formation.

The deal is expected to add to Whitecap’s 2011 cash flow per share, production per share, proved plus probable reserves per share and net asset value per share.

Following the deal, Whitecap, whose operations are mainly in northwest central Alberta and southwest Saskatchewan, also raised its 2011 outlook. It expects production in the year to average 5,600-5,800 boe/d, up from its prior view of 3,500 boe/d.

It sees 2011 exit production of 7,800-8,000 boe/d, compared with its earlier view of 4,500 boe/d.

National Bank Financial Inc is financial adviser to Whitecap.

Whitecap Resources shares were trading a percent lower on Tuesday at the Toronto Stock Exchange. They had closed at C$7.00 on Monday. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila)

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