Korea National Oil acquires Canada's Harvest Energy for $3.95 billion

South Korea's state-run oil and gas company Korea National Oil Corp (KNOC) has bought the Canadian energy company Harvest Energy Trust for $3.95 billion, Korea's Yonhap news agency reported today.

The merger will improve the country's self-sufficiency in the critical resource, the ministry of knowledge economy said adding that the deal will likely accelerate KNOC's ongoing efforts to buy more overseas oil fields and oil firms, to boost its assets.

Harvest Energy has confirmed reserves of 219.9 million barrels as of January this year and has 950 employees. It has oil fields in Alberta, Saskatchewan and British Colombia.

As per the deal, KNOC will purchase all the issued and outstanding trust units of the Calgary-based oil firm at a price of C$10 per unit for a total cash consideration of approximately C$1.8 billion plus the assumption of C$2.3 billion of debt, aggregating C$4.1 billion ($3.95 billion).

The arrangement represents a 47 per cent premium over the 30-day weighted average trading price of the units on the Toronto Stock Exchange up to and including October 20, 2009.

"Harvest has a considerable portfolio of opportunities including large oil in place assets coupled with production and throughput expansion opportunities in the upstream and downstream segments,'' said John Zahary, president and chief executive officer of Harvest.