Corporate M&A

Whitecap Resources Acquires TORC Oil & Gas

By Mahati K L
December 08, 2020
2 minutes read
Maple Leaf

TSX-listed Whitecap Resources Inc. has entered into a business combination agreement to acquire 100% of Calgary-based TORC Oil & Gas Ltd., in an at market, all-stock corporate transaction valued at approximately C$882 million, including net debt adjustments.

Under the terms of the agreement, shareholders of TORC will receive 0.57 shares of Whitecap for each TORC share held, resulting in the issuance of approximately 127 million Whitecap shares. Based on its closing price of C$4.30 per share on December 7th, this amounts to a total offer value of approximately C$547 million. Adjusting for TORC’s net debt, which is estimated at C$335 million as at December 31st, 2020, the total transaction value is approximately C$882 million (~US$689 million).

TORC Oil & Gas is focused on operations in the Torquay / Three Forks, Mississippian light oil plays and the Cardium formation in the Western Canada Sedimentary Basin . The company holds interests in approximately 327,622 net acres located primarily in south-east Saskatchewan, Manitoba, and central Alberta. Total 1P and 2P Reserves attributable to TORC (as of December 31st, 2019) are approximately 90.8 and 139.7 million barrels of oil equivalent (MMBoe), respectively. Production for the company currently averages approximately 25,000 barrels of oil equivalent per day (boe/d), of which 80% is oil.

Whitecap is focused on liquids-rich producing assets across Alberta, British Columbia and Saskatchewan, including the Boundary Lake area, Deep Basin, Cardium Formation, south-west Saskatchewan Viking Formation, and the Weyburn and Midale Units in south-east Saskatchewan.

The pro forma entity is expected to have average production ranging between 99,000 and 101,000 boe/d in 2021. The combined entity will have an enterprise value of around C$4 billion, and will be led by Whitecap’s executive team.

“We are combining two strong Canadian energy producers to form a leading large-cap, light oil company geared towards generating sustainable long-term returns for shareholders while prioritizing responsible Canadian energy development,” said Whitecap’s President & CEO Grant Fagerheim.

“Despite the challenging conditions and significant volatility throughout the year, we have become an even stronger and more resilient energy producer entering 2021 with the combination with TORC as well as the NAL transaction announced on August 31, 2020,” he added.

National Bank Financial Inc. is acting as exclusive financial advisor to Whitecap, while RBC Capital Markets is advising TORC on the deal.

The transaction has been approved by the boards of directors of both companies and is subject to customary closing conditions including regulatory, shareholder, and court approvals. It is expected to close on or before February 25th, 2021.

More news
Access our Global Upstream Oil & Gas M&A, Financing and Corporate Database
Quick registration, online payment and instant access
View pricing