Canada based crude petroleum and natural gas extractor Whitecap Resource Inc. (TSE: WCP) announced having agreed to purchase competitor TORC Oil & Gas Ltd (TSE: TOG) n a deal worth C$552 million ($430.81 million).
Whitecap said the deal will be an all-stock one.
Canada has the third largest oil reserves and it’s fourth largest oil producer and exporter of oil worldwide. However due to movement restrictions and reduced travelling across the world courtesy of the pandemic the country’s oil and gas sector has found itself in tough positions forcing the sector to cut down on costs.
Demand of fuel products has drastically dropped since the pandemic set foot affecting energy companies far and beyond.
Terms and agreement under the deal says that TORC shareholders will get 0.57 share of Whitecap in exchange for one share of TORC. This denotes a 4.3% share discount of last closing price of TORC’s stock.
The deal will leave Whitecap with a market valuation of C$4 billion. Whitecap will take over net debt of TORC which is currently at C$335 million.
The deal is expected to close before the 2021 first quarter is over.