Whitecap Resources Inc. (TSX: WCP) continues its acquisition strategy with a purchase and sale agreement to acquire XTO Energy Canada. The transaction is reportedly for a total cash consideration of $1.9 billion, net $1.7 billion after assuming positive working capital on closing.
The acquisition is set to expand the firm’s Montney assets with a total of 598,000 acres of land, plus an entry into Duvernay territory with 74,000 acres.
Once the transaction closes, the company expects an incremental $200 million in its annual free funds flow. Average throughput for balance 2022 is expected to increase to 138,000 – 140,000 boe/d from 130,000 – 132,000 boe/d.
For 2023, a 27% bump in average production is expected post-closing, hitting 168,000 – 174,000 boe/d from previously expected 135,000 boe/d average annual throughput.
The energy firm said it has taken a new $1.1 billion 4-year term loan to finance the acquisition, bringing its total credit capacity to $3.1 billion.
XTO Energy Canada is jointly owned on a 50-50 basis by Imperial Oil Resources and ExxonMobil Canada.
The transaction is expected to close by end of Q3 2022, subject to customary closing conditions and regulatory approvals.
Whitecap Resources last traded at $9.12 on the TSX, down 6.17% on the day.
Information for this briefing was found via Sedar, OIl & Gas Journal, and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
