Pacific Rubiales to buy C&C Energia, expand in Colombia
(Reuters) - Oil and natural gas producer Pacific Rubiales Energy Corp (PRE.TO) will buy C&C Energia Ltd CZE.TO in a deal valued at about C$500 million ($500 million) to strengthen its presence in Colombia.
The acquisition will give Pacific Rubiales access to the Cravoviejo, Cachicamo, Llanos 19 and Pajaro Pinto blocks in the prolific Llanos basin, the most important heavy oil basin in the country.
C&C Energia holds interests in eight blocks in Colombia totaling 647,500 acres, according to information on the company's website. The company was expecting production to average about 10,800 barrels of oil per day for the year.
"This transaction not only crystalizes the value of the producing assets that we have developed over the last five years at very attractive metrics but also retains our shareholders' exposure to some exciting high potential exploration opportunities," said Randy McLeod, CEO of C&C Energia.
Pacific Rubiales offer of about C$7.81 per C&C Energia share represents a premium of 4 percent to the stock's Friday close of C$7.50.
Each common share of C&C Energia will be exchanged for 0.3528 common shares of Pacific Rubiales and one common share of a new exploration company under the deal, Pacific Rubiales said.
Pacific Rubiales is likely to retain a 5 percent stake in the new exploration company, which is expected to acquire C&C Energia's interests in the Coati, Andaquies, Morpho and Putumayo-8 blocks in Colombia and receive cash of about $80 million from C&C Energia.
C&C Energia values the new exploration company at about C$2.00 per share, representing a combined offer of about C$9.81.
Shares of C&C Energia, which had a market value of about C$479 million as of Friday close, rose as much as 25 percent to C$9.41 on the Toronto Stock Exchange on Monday.
Shares of Pacific Rubiales, which has a market value of C$6.54 billion, fell 2 percent to C$21.72.
($1 = 1.0034 Canadian dollars)
(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Maju Samuel, Sriraj Kalluvila)
- Former WWE champ nabs suspected burglar in Arizona
- First Ebola victim in Sierra Leone capital on the run
- Thousands take to N.Y. streets to protest Israeli offensive in Gaza
- Apple iPhones allow extraction of deep personal data, researcher finds
- U.S. fighter jets escort Canadian plane home over passenger threat