Canada’s Tourmaline Oil dominates Montney shale with $947 million Crew Energy acquisition
(Bloomberg) – Canada’s biggest gas driller Tourmaline Oil Corp. agreed to buy Crew Energy Inc. for C$1.3 billion ($947 million), including debt, as consolidation continues in the oil and gas industry.
The all-stock transaction is valued at approximately C$6.69 a share, representing a 72% premium over Crew’s closing price on Friday, according to a statement from Crew on Monday. Crew shareholders will receive 0.114802 of a Tourmaline share in exchange for each Crew share held. The transaction includes C$240 million in Crew’s net debt.
The deal by Tourmaline continues a series of acquisitions in recent years. In October, the company agreed to buy Bonavista Energy Corp. for about C$1.5 billion.
Tourmaline’s board also approved an increase in the company’s quarterly dividend, to 35 Canadian cents a share from 33 Canadian cents, the company said in a separate statement.
According to a Tourmaline press release, the acquisition includes existing low decline average base production of 29,000 – 30,000 boed, externally and independently evaluated proved and probable ("2P") reserves of 473.2 MMboe, and an extensive drilling inventory, including over 700 Tier 1 locations (246 net Montney locations booked in the Sproule Report 2P reserve category). The Crew assets are immediately adjacent to Tourmaline's existing South Montney operated complex.
Additionally, Tourmaline has identified multiple synergies associated with the Crew deal, including drilling and completion capital cost improvements, infrastructure capital cost reduction opportunities, as well as liquids growth and margin improvement opportunities.
Tourmaline already is the largest Alberta Deep basin producer; the BC/AB Montney and the Alberta Deep basin are widely regarded as Canada's two premier natural gas plays. In addition, the acquisition complements Tourmaline's continued growth towards a 750,000 boed Canadian senior producer over the next five years.
Tourmaline said the Crew deal will help facilitate the company into becoming Montney’s largest oil and gas producer.
World Oil added additional information regarding the acquisition in paragraphs 4-8.
