October 18, 2010 / 11:35 AM / in 7 years

UPDATE 1-Western Energy to buy Pantera Drilling for C$47.5 mln

* To also assume debt of C$16.6 mln

* Deal at 37 pct premium

* Deal to add over 12 pct to Western’s 2011 cash flow/shr

* Western Energy to own 72 pct of combined entity

Oct 18 (Reuters) - Canada’s Western Energy Services WRG.V said it will buy all outstanding units of Pantera Drilling Income Trust RIG_u.TO for about C$47.5 million ($47.08 million) in stock, to augment its oilfield services in Canada.

Pantera unitholders will receive 21.9048 common shares of Western Energy for each Pantera unit held.

The offer values Pantera units at C$4.6 apiece, which is a 37 percent premium to Pantera’s Friday close of C$3.35 on the Toronto Stock Exchange.

“Combining the Pantera fleet with our own will give Western a 22-rig fleet and establish Western as the seventh largest contract driller in Canada,” Dale Tremblay, Chief Executive of Western Energy said in a statement.

The deal is anticipated to add over 12 percent to Western Energy’s 2011 cash flow per share, the companies said.

On completion of the deal, Western Energy will own about 72 percent of the combined entity and Pantera unitholders will own about 28 percent on a fully diluted basis, the statement said.

Western Energy expects to have about C$33 million of net debt on closing of the deal.

Pantera said it will not solicit or initiate discussions regarding any other business combination or sale of material assets.

Western Energy shares have gained about 20 percent since it acquired Impact Drilling on July 19. They closed at 21 Canadian cents Friday on the Toronto Venture Exchange. ($1=1.009 Canadian Dollar) (Reporting by Gowri Jayakumar in Bangalore; Editing by Roshni Menon)

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