Canada's Baytex Energy to acquire Australia's Aurora Oil & Gas for C$2.6 bn
07 February 2014
Baytex Energy Corp, a Canadian oil and natural gas company, yesterday struck a deal to buy Australia's Aurora Oil & Gas Ltd, for C$2.6 billion ($2.4 billion) including debt.
The acquisition, which is the largest in Baytex's 20-year history, will add production from the prolific Eagle Ford shale oil region of Texas.
Baytex is offering to pay A$4.10 per share, a 52-per cent premium to Aurora's average price in the past week, valuing the Perth-based company at A$1.84 billion.
The Calgary-based company said it will pay a total $1.8-billion for the shares and assume $744-million of Aurora's long-term debt, taking the total transaction value to C$2.6 billion.
Aurora's primary asset is 22,200 acres in the prolific Sugarkane Field located in South Texas in the heart of the liquids-rich Eagle Ford shale.
Aurora's last quarter gross production was 24,678 boe/d of predominantly light, high-quality crude oil.
Baytex said that the Sugarkane Field has been largely delineated with infrastructure in place which is expected to facilitate low-risk future annual production growth. In addition, these assets have significant future reserves upside potential from well downspacing, improving completion techniques and new development targets in additional zones.
Baytex's total production upon closing of the acquisition is forecast to be approximately 85,000 boe/d, of which, 53 per cent would be heavy oil, 34 per cent light oil and liquids and 13 per cent natural gas.
''While as a board we believe Aurora is well positioned and are confident in its future growth outlook, the board has undertaken a thorough assessment of the proposal from Baytex and believes it represents an attractive opportunity for shareholders to realise value at a significant premium to the current share price,'' Aurora executive chairman Jon Stewart, said in a statement.
The deal is subject to Aurora shareholder approval and other clearances, including the Australian Foreign Investment Review Board.