Canadian energy producer Vermilion Energy has completed the previously announced acquisition of private oil and gas company Westbrick Energy for C$1.075bn ($746.53m), expanding its production capabilities and asset base in Alberta’s Deep Basin.
The acquisition includes around 1.1 million (770,000 net) acres in Alberta’s Deep Basin trend, along with four operated gas plants with a total capacity of 102 million cubic feet per day (mcf/d).
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This new footprint aligns with Vermilion’s existing Deep Basin assets, offering substantial operational and corporate synergies.
The deal adds 50,000 barrels of oil equivalent per day (boepd) to Vermilion’s output, comprising 75% gas and 25% liquids, making the company the fifth-largest Deep Basin producer.
As part of the acquisition terms, Westbrick shareholders had the option to receive up to 1.7 million Vermilion common shares, capped at a value of C$25m.
Some shareholders opted for Vermilion shares, amounting to 1.1 million shares valued at C$14.2m.
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By GlobalDataThe remaining payment for the acquisition will be in cash, sourced from Vermilion’s existing funds, a new C$450m term loan and a C$1.35bn undrawn revolving credit facility.
Vermilion has identified more than 700 future drilling locations within the acquired acreage, targeting multiple geological zones.
These areas have projected half-cycle internal rates of return (IRRs) between 40% and more than 100%, according to McDaniel & Associates Consultants.
The company anticipates that these assets will maintain steady production for more than 15 years, concurrently generating free cash flow.
Vermilion is set to update its 2025 budget and financial guidance to reflect the company’s growth post-acquisition, which will be announced along with its fourth quarter 2024 results on 5 March 2025.
The company announced its plans to acquire Westbrick in December 2024.
