Kiwetinohk Energy (TSX: KEC) is set to go private as the latest major transaction within the Canadian oil and gas sector. The company this morning indicated that it has entered into an arrangement with private operator Cygnet Energy to be acquired under an all-cash arrangement.
Cygnet is set to acquire the company for cash consideration of $24.75 per share by way of a plan of arrangement. The figure values Kiwetinohk at an enterprise value of $1.4 billion, and is a slight premium to the total proved NPV15 reserve value of $1.3 billion as per the 2024 year end reserve report published by Kiwetinohk.
On a per share basis, the figure represents a premium of 63% relative to the closing price on March 5, when Kiwetinohk initially announced a business strategy review was underway. Versus Monday’s close however the premium is just 10.4%.
Funds for the transaction are expected to come from NGP Energy Capital Management and Carlyle, whom are making backers of the company, while Arc Financial, who is also a backer of Cygnet and holds a 22% position in Kiwetinohk, will see their interest in Kiwetinohk rollover into Cygnet.
“Since formation in 2018, Kiwetinohk has grown into a premium unconventional growth company differentiated by peer leading netbacks, high quality liquids rich Duvernay assets, an overlapping Montney resource with significant future potential, owned and operated infrastructure and access to the premium Chicago market for natural gas. [..] After reviewing all of our available options [..] the Board has determined that the Arrangement is the best alternative in the current market,” commented Pat Carlson, CEO of Kiwetinohk.
Directors and officers of the company, along with it’s two largest shareholders, which collectively represent 79% of the issued and outstanding shares of Kiwetinohk have entered voting support agreements in favor of the transaction. Closing is slated to occur shortly after the shareholder vote, which is scheduled for December 16, 2025.
Kiwetinohk Energy last traded at $22.42 on the TSX.
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