Canadian Natural announces Painted Pony acquisition
Canadian Natural Resources Limited will increase its holdings in western Canada with the acquisition of Painted Pony Energy Ltd., in a deal worth approximately $461 million in total.
Canadian Natural will pay a cash consideration of $0.69 per share, and will also assume Painted Pony's total debt of approximately $350 million. This transaction value represents approximately 1 percent of Canadian Natural's enterprise value and does not materially impact the Company's balance sheet strength or liquidity position. Painted Pony's land and production are located within Canadian Natural's core area providing opportunity to leverage synergies with a significant amount of pre-built infrastructure and transportation available.
In a statement, Painted Pony noted that several years of lower natural gas prices have left it with liquidity challenges, and that this deal represents the best alternative for its shareholders.
Current production, before royalties, acquired by Canadian Natural, is approximately 270 million cubic feet per day of natural gas and 4,600 barrels per day of NGLs. The assets include properties in the Northeast British Columbia areas of Blair, Daiber, Kobes and Townsend.
In commenting on the acquisition, Canadian Natural's President, Tim McKay stated, "This acquisition further strengthens Canadian Natural's natural gas assets and production base in key operating areas and complements the Company's diversified portfolio. This transaction also allows us to further insulate against natural gas costs in our oils sands operations and has minimal impact on the Company's low overall corporate decline rate. We look forward to working together with the staff currently employed by Painted Pony."
The transaction is targeted to close in late Q3 or early Q4, 2020, subject to normal closing conditions.