Wedoany.com Report-Mar 11, Canada-based Whitecap Resources and Veren have signed a definitive business combination agreement to create one of the leading producers of light oil and condensate in the country.
In Saskatchewan, the merged company will become the second largest producer.
The all-share transaction, valued at approximately C$15bn ($10.4bn) including net debt, positions the combined entity as the largest holder of land in the Alberta Montney and Duvernay regions. The merger is expected to close by 30 May 2025, subject to customary closing conditions and regulatory approvals.
Under the terms of the agreement, Veren shareholders will receive 1.05 Whitecap common shares for each share of Veren they own. The new company will operate under the Whitecap name and management, with the addition of four Veren directors to the Whitecap Board, including Veren’s President & CEO, Craig Bryksa.
Post-transaction, Whitecap and Veren shareholders will own approximately 48% and 52% of the combined entity, respectively.
Whitecap president and CEO Grant Fagerheim said: “We are excited to bring together two exceptionally strong asset bases to create one world-class energy producer with one of the deepest inventory growth sets of both liquids-rich Montney and Duvernay opportunities, along with conventional light oil opportunities in some of the most profitable plays in the Western Canadian basin.
“Our combined company will include exceptional technical and support personnel from the two companies in both the office and field and an experienced Board of Directors that prioritises sustainable and profitable growth to generate strong returns for our combined shareholders. We look forward to bringing Whitecap and Veren together and providing increased value to both sets of shareholders well into the future.”
The merger will create a combined firm with a production capacity of 370,000 barrels of oil equivalent per day (boe/d), with 63% in liquids. It will be the seventh largest producer in the Western Canadian Sedimentary Basin and the largest in both the Kaybob Duvernay and Alberta Montney, boasting approximately 220,000 boe/d of unconventional production.
In Saskatchewan, the merged company will become the second largest producer with a strong presence in both west and southeast regions.
The companies anticipate over C$200m in annual synergies from the merger, stemming from operating, capital, and corporate efficiencies, irrespective of commodity prices.
Whitecap Resources has secured an increase in its credit facilities concurrent with the signing of the merger agreement with Veren. The company has received commitments from financial institutions, including National Bank of Canada (NBC) and Toronto Dominion Bank (TD), with National Bank Financial Markets and TD Securities acting as Joint Bookrunners and Co-Lead Arrangers. This arrangement includes a C$500m increase to Whitecap’s existing C$2bn credit facilities and an additional C$1bn credit facility, fully committed by NBC, TD, Bank of Montreal, and Bank of Nova Scotia.
Upon closing the transaction, these facilities will provide Whitecap with a total credit capacity of C$3.5bn.
An independent special committee of the Board of Directors of Veren, formed to review the transaction, unanimously determined that the deal is in the best interests of Veren.
The shareholders of the two companies are expected to approve the merger at special meetings slated to be held in May 2025.
In October 2024, Canadian Natural Resources agreed to acquire the Alberta, Canada assets of Chevron for a consideration of $6.5bn.
