Canadian oil producer Whitecap to buy TORC Oil & Gas for $430 million

FILE PHOTO: A TORC Oil & Gas pump jack is seen near Granum, Alberta, Canada May 6, 2020. REUTERS/Todd Korol

(Reuters) - Canadian oil producer Whitecap Resources Inc said on Tuesday it has agreed to buy rival TORC Oil & Gas Ltd in an all-stock deal valued at about C$552 million ($430.81 million).

The collapse in fuel demand due to coronavirus-related lockdowns has hammered energy companies in Canada, the fourth-largest global oil producer, triggering a wave of consolidation and cost-cuts in the sector.

Cenovus Energy Inc said in October it had agreed to buy Husky Energy Inc for C$3.8 billion ($2.97 billion) in a deal that would create Canada’s No. 3 oil and gas producer.

Under the deal announced on Tuesday, shareholders of TORC will receive 0.57 Whitecap shares in exchange for each TORC share, representing a discount of about 4.3% to the last closing price of TORC shares.

Whitecap will also take on C$335 million of TORC debt.

The oil producer said it would have an enterprise value of about C$4 billion after the deal, which is expected to close on or before Feb. 25.

In August, Whitecap said it would buy NAL Resources Ltd, owned by Manulife Financial Corp, for C$155 million.

Reporting by Dania Nadeem in Bengaluru; Editing by Aditya Soni