Vermilion Energy has signed an agreement to acquire Canadian oil and gas firm Spartan Energy for C$1.40bn ($1.11bn).
Expected to enhance Vermilion’s footprint in Saskatchewan, Canada, the deal will see Vermilion offer C$1.23bn ($976.7m) in shares and assume around C$175m ($138.96m) in debt.
The transaction also comprises the construction of infrastructure and collation of 2D and 3D seismic data.
Spartan currently holds 480,000 net acres of oil-producing properties in the Canadian provinces of Saskatchewan, Alberta and Manitoba.
The company is expected to produce around 23,000 barrels of oil equivalent per day (boe/d) this year.
Vermilion Energy CEO Anthony Marino was quoted by The Canadian Press as saying: “The Canadian sector continued to be more and more unloved over time, especially in the past year in the capital markets, and with our evaluation methodology and criteria we had, we found it came to represent better and better value.
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By GlobalData“Spartan is probably the best example of this out there in that you have a company that is quite capable of rapid production growth.”
As of 31 December last year, the assets had total proved (1P) and proved plus probable (2P) reserves of 73 million barrels of oil equivalent (mmboe) and 113.5 mmboe, respectively.
Following an internal evaluation of Spartan’s reserves, Vermilion identified more than 1,000 development locations targeting the Ratcliffe, Midale, Frobisher, Bakken and Torquay formations. There are also several identified drilling locations in the hydraulically fractured Midale play.
Subject to receipt of shareholder and regulatory approvals, the transaction is scheduled to close on or around 15 June.
