Corporate M&A

Journey Energy Acquires Cardium-Focused Producer Briko Energy

By Isha Makkar
June 24, 2021
a minute read
Three Oil Pumpjacks

TSX-listed Journey Energy Inc. has entered into an arrangement agreement to acquire 100% of the issued and outstanding share capital of privately-held Briko Energy Corp., in a cash and stock transaction valued at approximately C$5.8 million.

Under the terms of the deal, Journey will acquire Briko’s shares for approximately C$6.6 million, payable in either cash or Journey Energy shares, with a maximum of C$2.9 million payable in cash. Adjusting for the target’s projected working capital surplus of C$800,000 at closing, the estimated transaction value is approximately C$5.8 million.

Based in Calgary, Briko is focused on the development of Cardium light oil properties in the Alberta foothills, and currently holds approximately 285,211 gross (195,028 net) acres of undeveloped land located primarily in the Nordegg and Grande Cache areas of Alberta. In addition, Briko Energy’s assets include an interest in both pipeline and facility infrastructure to transport production to the Ram River Gas Plant, other gas plants and NOVA sales meters without incurring third party disruption.

As of December 31st, 2020, total proved (1P) reserves attributable to the company were approximately 2.25 million barrels of oil equivalent (MMboe), while proved plus probable (2P) reserves were approximately 2.92 MMboe. The company has current average daily production of approximately 610 barrels of oil equivalent per day (boe/d), of which 76% is gas.

Journey is focused on conventional, oil-weighted operations in western Canada, with current operations concentrated in two core areas in central and southern Alberta.

Sayer Energy Advisors is acting as financial advisor to Briko on the transaction.

The transaction is subject to customary closing conditions, including Briko shareholders’ approval and the receipt of court approval, and is expected to close on or about August 18th.

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