ARC Resources Ltd. and Seven Generations Energy Ltd. announced Wednesday a strategic combination of the two Montney producers.
The companies say they have entered into a definitive agreement to combine in an all-share transaction valued at approximately $8.1 billion, inclusive of net debt.
"The transaction will create a combined company with material size and scale that enhances ARC’s and Seven Generations’s existing commodity and geographic diversification," the companies said in a news release. "The combined company will become Canada’s largest condensate producer, third-largest natural gas producer, and sixth-largest upstream energy company."
Combined production is expected to total over 340,000 boe/d in 2021, comprising approximately 138,000 bbls/d of liquids and approximately 1.2 bcf/d of natural gas.
The combined company will operate as ARC Resources Ltd. and remain headquartered in Calgary.
Approximately $110 million in annual cost savings is expected by 2022, the companies said.
Under the terms of the agreement, Seven Generations shareholders will receive 1.108 common shares of ARC for each common share of Seven Generations held. The combined company will continue to pay ARC's quarterly dividend of $0.06 per share, subject to board approval.
The combined company will include ARC’s Hal Kvisle as board chair, and Seven Generations’s Marty Proctor as board vice-chair. ARC’s Terry Anderson will serve as president and chief executive officer and director, ARC's Kris Bibby as senior vice president and chief financial officer, and Seven Generations' David Holt as senior vice president and chief operating officer.
–– Alaska Highway News