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CALGARY – Investors applauded Arc Resources Ltd with higher share prices and Seven Generations Energy Ltd On Thursday after an oil patch marriage was announced, an analyst called “a high quality merger of equal value”

The Calgary-based companies announced late Wednesday that they had agreed to a deal in which Arc will issue 108 shares for each share of Seven Generations valued at $ 2 for Seven Generations at $ 74 billion at Arc’s closing price on Wednesday

“We’re excited about the tremendous opportunity Arc and Seven Generations are offering,” said Terry Anderson, CEO of Arc, on a conference call Wednesday evening

“We recognize that the combined company will be better positioned to collectively maximize long-term value to each company individually”


In early Toronto trading, Seven Generations stock rose as much as 108 percent to $ 888 and Arc rose nine percent to $ 809

The combined company will be known as Arc Resources Ltd and remain headquartered in Calgary Arc chairman Hal Kvisle and CEO Anderson will continue in their roles while Seven Generations CEO Marty Proctor becomes vice chairman

“When the discussions first began, we realized that the combined company has the scale and high quality asset base essential to remain competitive in both the changing energy industry and the developing capital market “said Proctor on the call

“I am proud of what we at Seven Generations Energy have achieved in a relatively short period of time”

Arc and Seven Generations anticipate cost savings from synergies of approximately $ 110 million per year through 2022 and continue to pay ARC’s quarterly dividend of six cents per share

“We believe that given synergies, solid acquisition metrics and a clear path to accelerated shareholder returns, we believe the market’s response to this transaction will be positive, which should add value well beyond the implied acquisition premium at the time,” said analyst Cody Kwong from Stifel FirstEnergy

“The market has asked for M&A in the E&P area (explorer and producer) – and the combination of ARX and VII does not disappoint! In one fell swoop, the merger creates the “Canadian condensate champion”, wrote the analyst Justin Bouchard from Desjardins

The merged companies will be Canada’s largest condensate producer, third largest natural gas producer and sixth largest oil and gas producer

Condensate is a very light oil, often made with natural gas, and is highly valued by oil and sand producers who mix it with heavy bitumen to allow it to flow in a pipeline.It is usually at or near benchmark U acted S. Oil prices

Total combined production is expected to exceed 340 this year000 barrels of oil equivalent per day, consisting of around 138000 barrels of liquids such as condensate and 1 barrel per day 2 billion cubic feet of natural gas per day

The companies are among the largest drills in the Montney, an extensive subterranean formation that spans the Alberta-BC Edge The liquid-rich natural gas resource has been tapped over the past twelve years with the development of technologies such as horizontal drilling and multi-stage hydraulic fracking, or “fracking” “

Access to Montney has been the price of several other deals recently, including Canadian Natural Resources LtdAcquisition of Painted Pony Energy Ltd worth 111 million Which closed in October and the acquisition of Kelt Exploration Ltd worth 510 million ConocoPhillips’ USDMontney position of Houston last summer

The transaction is subject to shareholder and regulatory approvals and is expected to close in the second quarter of 2021

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ARC Resources

World News – CA – The shares in Arc Resources and Seven Generations find out about the merger of oil fields

Source: https://www.thestar.com/business/2021/02/11/arc-resources-announces-deal-to-merge-with-seven-generations-energy.html