Malaysia's Petronas to Buy Progress Energy

Malaysia's Petronas to Buy Progress Energy

Malaysian national oil and gas company Petronas will acquire Calgary-based Progress Energy Resources Corp. in a stock transaction valued at approximately $5.3 billion (CAD $5.5 billion).

The transaction follows a joint venture established between Petronas and Progress last year to develop a portion of Progress' Montney shale assets in the foothills of northeast British Columbia and to explore additional opportunities to develop liquefied natural gas (LNG) export capacity on British Columbia's west coast.

"The proposed transaction will combine Petronas' significant global expertise and leadership in developing LNG infrastructure with Progress' extensive experience in unconventional resource development to build a strong and growing world class energy business based in Canada," said Datuk Aunuar Ahmad, executive vice president of Petronas gas and power business, in a statement Thursday.

The joint venture has selected a site in Prince Rupert, British Columbia for the companies' planned LNG export capacity, said Ahmad. A Feasilibility Assessment Agreement has been signed with the Prince Rupert Port Authority to conduct further feasibility and investigative studies on Lelu Island.

"We have begun engagement with relevant authorities and First nations, as well as community groups, and we look forward to working closely with them in the course of our site investigation," Ahmad commented.

Progress' board of directors have unanimously approved the deal, in which Petronas would acquire all of Progress' outstanding common shares for $19.82/share (CAD $20.45/share). The acquisition represents a 77 percent premium over Progress' closing share price on the Toronto Stock Exchange of $11.19/share (CAD $11.55/share) on June 27.

The acquisition represents a 77 percent premium over Progress' closing share price on the Toronto Stock Exchange of $11.19/share (CAD $11.55/share) on June 27 and 83 percent over Progress' 30-trading day volume weighted average trading price of C$11.18/share ending on June 27.

Petronas plans to retain all of Progress' employees to capitalize on the experience and depth of the Progress team. Canadian operations will remain based in Calgary for upstream activity, with a commercial office in Vancouver for LNG.



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