Mergers & acquisitions wagon rolling
Canada didn’t have long to wait for the forecast M&A frenzy to make an appearance in 2008, with NuVista Energy reaching an agreement to acquire Rider Resources for an estimated purchase price of C$560 million, including C$35 million for land.
If two-thirds of Rider shareholders ratify the transaction in March, the new entity will produce an average 24,500 barrels of oil equivalent per day this year, exiting 2008 at about 26,500 boe per day. Rider will contribute 155,000 net undeveloped acres to the 500,000 acres NuVista already controls and pump in 30 million boe of proved and probable reserves, weighted 77 percent to natural gas, boosting NuVista to 70 million boe, with the reserves averaging C$18.35 per boe.
NuVista got a further boost from Ontario Teachers’ Pension Plan, one of the largest institutional investors in Canada, which agreed to subscribe to 6 million units at C$14 each for proceeds of C$84 million to be issued on a private placement basis.
NuVista Chief Executive Officer Alex Verge said the deal offers new areas for growth, including high netback natural gas properties and a longer reserve life. He said it covers a spectrum from shallow gas to heavy oil in Alberta and Saskatchewan.
—Gary Park
|