CALGARY, Alberta Dec 20 A trio of small oil and
gas companies said on Thursday they have agreed to combine to
form a mid-sized Canadian producer, focusing on light crude in
Alberta and paying dividends.
Pace Oil and Gas Ltd, AvenEx Energy Corp
and Charger Energy Corp said they would offer new shares
in a combined operation known as Spyglass Resources Corp that
will produce about 18,000 barrels of oil equivalent a day.
It will be led by former Provident Energy executives, Tom
Buchanan as chief executive and Dan O'Byrne as president, the
Combined properties are in such Alberta geological zones as
Halkirk-Provost Viking, Randell Slave Point and Gilwood and the
Under the deal, 1.3 Spyglass shares would be exchanged for
each Pace share, one Spyglass share for each AvenEx share, and
0.18 Spyglass shares for each Charger share.
The transaction values Pace shares at C$4.32 each, AvenEx
shares at C$3.32 each, and Charger shares at 60 Canadian cents
each, the firms said.
"The combined asset base features mature, low decline
properties and a balanced commodity profile coupled with the
light oil development opportunities needed to sustain the
model," Buchanan said in a statement.
The companies said recent deep discounts on Canadian heavy
crude show the value of assets producing light oil, which has
been much closer to U.S. benchmark prices.
Capital spending for 2013 is budgeted at C$80 million to
C$90 million (US$81 million to C$91 million).
The companies said they would hold meetings for their
shareholders in February to vote on the transaction. Two-thirds
of each company's shareholders must approve the deal for it to
proceed, they said.
The deal is expected to close in February.