Tourmaline Oil Corp. agreed to buy Bonavista Energy Corp. for about C$1.5 billion ($1.1 billion) in cash and stock to increase its presence in the Deep Basin gas play in western Canada.
Canada’s largest gas producer will acquire Bonavista for C$725 million in Tourmaline common shares and C$725 million in cash, less Bonavista’s net debt, the Calgary-based company said Monday. Tourmaline’s output will increase to the equivalent of 600,000 barrels of oil a day after the acquisition, which is expected to close late next month.
“The acquisition will be immediately accretive to cash flow, with the assets expected to generate annual operating income of about C$450 million over the next three years,” Chris MacCulloch, analyst at Desjardins Securities Inc., said in a note.
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