Canadian oil producer Whitecap to buy NAL Resources for nearly $119 mln

Bonterra Energy

31/08/2020 13:24

Aug 31 (Reuters) - Canadian oil producer Whitecap Resources
Inc  WCP.TO  said on Monday it would buy NAL Resources Ltd,
owned by Manulife Financial Corp  MFC.TO , for C$155 million
($118.59 million) as it looks to boost its core Alberta and
Saskatchewan assets.
    Whitecap said it would issue 58.3 million of its shares to
Manulife in exchange for all the issued and outstanding shares
of NAL, which operates in Canada's Saskatchewan and Alberta. 
    Insurance and financial services provider Manulife will own
about 12.5% of the combined company.  urn:newsml:reuters.com:*:nCNWMMCTja
    The deal marks growing interest in mergers among smaller
Canadian oil producers to bolster their portfolios, as
uncertainty about future oil demand persists. 
    The COVID-19 pandemic destroyed fuel demand and left dozens
of energy companies without the prospect of drilling their way
out of debt or bankrupt, making consolidations a viable solution
for many smaller players.
    Separately on Monday, Calgary, Alberta based oil and gas
company Obsidian Energy Ltd  OBE.TO  offered two shares for
every share of Bonterra Energy Corp  BNE.TO .  urn:newsml:reuters.com:*:nCNWVP7lla 
    That would value Bonterra at about C$35 million, or C$1.06
per share, a 29.3% discount to its Friday close. Bonterra
shareholders would own about 48% in the combined company,
Obsidian said.
    Last month, top independent U.S. oil producer ConocoPhillips
 COP.N  said it would buy land from Kelt Exploration Ltd in
Canada's Montney shale oil play in a $375 million deal.
 urn:newsml:reuters.com:*:nL2N2ET293


($1 = 1.3070 Canadian dollars)

 (Reporting by Arunima Kumar in Bengaluru; Editing by Shinjini
Ganguli)
 ((Arunima.Kumar@thomsonreuters.com;))