Whitecap Buys XTO Energy Canada
Whitecap Resources Inc (TSX: WCP) has announced that it has entered into a purchase and sale agreement to acquire XTO Energy Canada for total cash consideration of approximately $1.9 billion and the assumption of estimated positive working capital on closing for a net purchase price of $1.7 billion.
The deal is expected to close before the end of the third quarter, subject to customary closing conditions, including the receipt of necessary regulatory approvals, Whitecap noted, adding that the acquisition will be funded through existing credit facilities and a new committed four-year term loan. On closing, Whitecap is expected to have net debt of $2.1 billion on total credit capacity of $3.1 billion and a debt to EBITDA ratio of 0.8 times, decreasing to 0.6 times at year end on current strip pricing, the company outlined.
Whitecap noted that the acquisition significantly improves its free funds flow profile, adds top tier Montney inventory by expanding and consolidating certain working interests in Whitecap’s current Montney assets in the greater Kakwa, Alberta region, and represents an entry into the prolific liquids rich Duvernay play at Kaybob. The acquired assets are currently producing approximately 32,000 barrels of oil equivalent per day from the Duvernay and Montney formations in Northwest Alberta and include 672,000 acres of land containing over 20 years of tier one drilling locations, the company highlighted.
In December last year, Whitecap announced three separate transactions which it said will consolidate core assets within its Central Alberta, Eastern Saskatchewan and Western Saskatchewan business units. The combined purchase price of the acquisitions was $342.5 million, consisting of approximately 15.2 million Whitecap shares at a weighted average price of $7.20 per share and approximately $240 million of cash, the company revealed.
Back in April, Whitecap revealed that it had entered into an arrangement agreement to indirectly acquire Kicking Horse Oil & Gas Ltd for aggregate consideration of $300 million and in December 2020, the company announced a business combination with TORC Oil & Gas Ltd. Under the TORC deal, the companies agreed to combine their businesses in an at market, all-stock transaction valued at approximately $900 million, Whitecap highlighted at the time.
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