Whitecap Resources and Veren have announced their agreement to merge in a US$10.4 billion (C$15 billion) deal, set to form a major Canadian light oil and condensate producer. The companies revealed on Monday that they had entered a definitive business combination agreement, which will be an all-share transaction, including net debt.
The new, combined company will have an enterprise value of US$10.4 billion (C$15 billion) and a production capacity of 370,000 barrels of oil per day (boe/d), with 63% of that production being liquids. Both companies highlighted substantial overlap in their unconventional and conventional assets.
This merger will result in the creation of the largest Canadian light oil-focused producer and the seventh largest in the Western Canadian Sedimentary Basin. The new company will also have significant growth potential in natural gas production.
The merged company will be the dominant producer in the high-margin Kaybob Duvernay and Alberta Montney areas, with roughly 220,000 boe/d of unconventional production. It will also become the largest landholder in the Alberta Montney and the second largest in the broader Montney and Duvernay regions, with 1.5 million acres of land in Alberta.
“We are thrilled to combine two strong asset portfolios to create a world-class energy producer with one of the most promising growth inventories in the liquids-rich Montney and Duvernay plays, as well as conventional light oil in some of the most profitable regions in the Western Canadian Basin,” said Grant Fagerheim, Whitecap’s president and CEO.
Under the deal, Veren shareholders will receive 1.05 common shares of Whitecap for each Veren share they hold. The new company will continue under the Whitecap name and will be led by Whitecap’s existing management team. Four Veren directors, including current President and CEO Craig Bryksa, will join the Whitecap Board of Directors.
The transaction is expected to close by May 30, 2025.
Analysts suggest that the recent wave of mergers and acquisitions in Canada is largely driven by opportunistic deals, rather than necessity, with many focusing on assets outside of the oil sands, such as the Duvernay Shale and Williston Basin.
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