Provident combines upstream business with Midnight Oil for C$460 million
21 Apr 2010
Provident Energy Trust (Provident), one of Canada's diversified energy companies with high quality upstream oil and gas assets as well as midstream operations, agreed to separate and combine its upstream business with Midnight Oil Exploration Ltd (Midnight), a junior energy player for approximately C$460 million ($461 million) in a cash and stock deal.
Provident also appointed Douglas Haughey as company's the new president and chief executive officer succeeding Tom Buchanan who has decided to step down, effective April 28, 2010, a statement said.
Under the terms of the transaction, Midnight will acquire all outstanding shares of Provident Energy Resources Inc, a wholly-owned subsidiary of Provident, which holds all of the oil and gas upstream assets for approximately C$460 million, consisting of C$120 million in cash and 324 million shares of Midnight valued at $340 million at a price of C$1.05 each.
Each Provident shareholder will get 0.12225 shares of the new company while each Midnight shareholder will receive 0.1 shares for every share held in the respective companies.
Calgary-based Provident has upstream oil and gas assets in Alberta and Saskatchewan and its midstream operations include extraction of Natural Gas Liquids (NGLs) and fractionation in plants located in Alberta, British Columbia and Ontario, and further storage, transportation and marketing across North America.
''The separation of Provident's businesses is intended to improve overall focus, competitiveness and enhance the growth profile of each business unit in order to realise the full potential of our assets and maximise long term unitholder returns,'' said Provident president and chief executive officer, Tom Buchanan.
