Tamarack Acquires Canadian Peer

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Alberta-based junior oil producer Tamarack Valley Energy has agreed to buy private rival Anegada Oil for a total of C$494 million (US$394 million), as the Canadian oil patch continues to consolidate. Tamarack said it will pay C$247.5 million in cash and debt and issue 105.3 million company shares priced at C$2.34 apiece to pay for the deal, expected to close next month. It is the latest in a flurry of M&A transactions in Western Canada following the latest industry downturn (OD Feb.11'21). Canadian M&A deals totaled some C$20 billion in 2020, up 149% from the C$8 billion in deals in 2019 and the highest level since 2017, according to consultancy Sayer Energy Advisors. In a recent report, Sayer cited the Covid-19 pandemic and “the continued lack of investment capital” as the main drivers of M&A in 2020. This year has gotten off to a fast start as well, with around C$7 billion in deals announced in the first quarter (OD Apr.5'21). More consolidation is likely on the way this year, Sayer said. Anegada controls about 321.2 net sections (205,568 acres) in the Charlie Lake light oil play, where it produces about 11,800 boe/d (71% oil and NGLs) with room for expansion. Tamarack says Charlie Lake “ranks among the most economic plays in North America” with rates of return exceeding 400%.

Corporate Strategy , M&A
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