Whitecap Resources to buy Kicking Horse Oil & Gas for $240m

Canadian oil firm Whitecap Resources has agreed to acquire Kicking Horse Oil & Gas, an indirect subsidiary of Quantum Energy Partners, in a stock-and-cash deal worth C$300m ($239.08m).

The deal consideration includes 34.5 million common shares of Whitecap and $56m ($44.6m) in cash. It also includes the assumption of $54m ($43m) net debt.

With the deal, Whitecap will add Kicking Horse’s assets in the liquids-rich portion of the Alberta Montney to its existing Northern Alberta and British Columbia business unit, while completing the existing Montney position at Karr.

Whitecap president and CEO Grant Fagerheim said: “We are excited about adding this asset to our portfolio as an advancement of our Montney growth strategy, creating an additional opportunity for our team to further generate strong returns for our shareholders.

“As we have integrated the NAL and TORC assets over the past several months, our team’s execution has been exceptional, and we are confident that will remain the same with this new asset.”

The acquisition forms part of Whitecap’s strategy to consolidate its assets in core operating areas in order to improve free funds flow.

Whitecap plans to complete the drilling of eight to ten wells to increase Kicking Horse’s production from about 8,000 barrels of oil equivalent per day (boepd) to 18,000boepd–19,000boepd over the next 12–15 months.

Kicking Horse CEO Steve Harding said: “We see this asset base as another significant facet of the expanding Whitecap footprint which will benefit from the advantages of scale as part of a larger franchise.”

The acquisition is planned to be completed by the end of May, subject to customary closing conditions and receipt of necessary regulatory approvals.