Corporate M&A

IPC Makes All-Cash Offer to Acquire Granite Oil

By Shriya Bhargava
January 20, 2020
a minute read
Person Holding Maple Leaf

Lundin Group company International Petroleum Corp. (IPC) has entered into an agreement to acquire TSX-listed light oil producer Granite Oil Corp., in an all-cash transaction valued at approximately US$59 million, including the assumption of US$30 million of debt. The cash offer represents a substantial 61% premium to the closing price of Granite Oil’s shares on January 17th. Granite Oil holds interests in light oil producing assets in the Milk River area of Alberta, located south-west of IPC’s existing operations in the Suffield area, just north of the U.S. border. The acquisition will add total 2P reserves of 14 million barrels of oil equivalent (MMboe) and approximately 1,500 barrels per day of oil production to IPC’s operations in southern Alberta. The acquired assets also include existing infrastructure to enable the current gas injection enhanced oil recovery (EOR) scheme, with capacity to allow for potential further field development opportunities. The completion of the acquisition through a plan of arrangement remains subject to customary closing conditions, including the receipt of approvals from Granite Oil’s shareholders, the Court of Queen’s Bench of Alberta, and applicable stock exchange and regulatory authorities, with an expected closing date in early March. Cormark Securities and National Bank Financial are acting as co-financial advisors to Granite Oil on the deal.

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