The world's largest energy company by market value, ExxonMobil Corp. announced that it has struck an acquisition deal with the Canadian gas driller company Celtic Exploration for 2.59 billion Canadian dollars (U.S. $2.63 billion).
Under the terms of the agreement, ExxonMobil Canada will acquire 545,000 net acres in the liquids-rich Montney shale, 104,000 net acres in the Duvernay shale and additional acreage in other areas of Alberta. Celtic's shareholders will receive $24.89 a share and e 0.5 of a share of a new company (Spinco) that will hold assets not included in the agreement.
"This acquisition will add significant liquids-rich resources to our existing North American unconventional portfolio," said Andrew Barry, president of ExxonMobil Canada. "Our financial and technical strength will enable us to maximize resource value by leveraging the experience of ExxonMobil subsidiary XTO Energy, a leading U.S. oil and natural gas producer which has expertise in developing tight gas, shale oil and gas and coal bed methane."
"Including the amount to be paid for Celtic's outstanding convertible debentures and including Celtic's bank debt and working capital obligations, the transaction is valued at approximately C$3.1 billion. The transaction is to be completed by way of an arrangement under the Business Corporations Act (Alberta)," Celtic said in a statement.
Based on the cash consideration (not including the value of Spinco shares), the transaction price represents a premium of 35 percent over Celtic's closing share price on the Toronto Stock Exchange of C$18.12 on Oct. 16, and 34 percent over Celtic's 30-trading day volume weighted average trading price of C$18.28 per share ending on Oct. 16, the statement said.
"Current production of the acreage to be acquired is 72 million cubic feet per day of natural gas and 4,000 barrels per day of crude, condensate and natural gas liquids," Exxon said in a statement. Approximately 60 employees at Celtic will be given the opportunity to transition to ExxonMobil employment. "The assets were estimated by Calgary-based Celtic Exploration at December 31, 2011 to include an estimated 128 million oil equivalent barrels of proved plus probable reserves, of which 24 percent are crude, condensate and natural gas liquids and 76 percent natural gas."
