Tourmaline Oil Corp., Canada’s leading gas driller, has agreed to acquire Crew Energy Inc. for C$1.3 billion ($947 million), including debt.
This all-stock transaction marks a significant consolidation move in the oil and gas sector.
Transaction Details and Shareholder Benefits
The deal values Crew Energy at approximately C$6.69 per share, a substantial 72% premium over its closing price on Friday.
Crew shareholders will receive 0.114802 of a Tourmaline share for each Crew share they hold. The transaction also encompasses C$240 million of Crew’s net debt.
Tourmaline’s Acquisition Spree Continues
This acquisition is the latest in a series of strategic moves by Tourmaline in recent years. Notably, in October, the company acquired Bonavista Energy Corp. for about C$1.5 billion.
Increased Dividend for Tourmaline Shareholders
In addition to the acquisition, Tourmaline’s board has approved an increase in the company’s quarterly dividend, raising it to 35 Canadian cents per share from 33 Canadian cents.
Acquisition Highlights and Synergies
The Crew Energy acquisition brings several benefits to Tourmaline, including existing low-decline production of 29,000-30,000 barrels of oil equivalent per day (boed), independently evaluated proved and probable reserves of 473.2 million barrels of oil equivalent (MMboe), and a vast drilling inventory.
The Crew assets are strategically located adjacent to Tourmaline’s existing South Montney operated complex.
Furthermore, Tourmaline has identified multiple synergies associated with the deal, including cost improvements in drilling, completion, and infrastructure, as well as opportunities for liquids growth and margin enhancement.
Strengthening Tourmaline’s Position in Key Natural Gas Plays
Tourmaline is already the largest producer in the Alberta Deep Basin. The BC/AB Montney and the Alberta Deep Basin are widely recognized as Canada’s two premier natural gas plays.
This acquisition complements Tourmaline’s ongoing growth strategy, aiming to become a 750,000 boed Canadian senior producer within the next five years.
Cementing Leadership in the Montney Shale
Tourmaline anticipates that the Crew deal will significantly contribute to its goal of becoming the largest oil and gas producer in the Montney region.