Key Canadian Montney Producers in C$8.1bn Combination
ARC Resources and Seven Generations Energy, two of the premier producers in the Canadian Montney unconventional natural gas play, said February 10 they would combine in a strategic all-share combination valued at C$8.1bn (US$6.37bn), inclusive of net debt.
Under the terms of a definitive agreement, Seven Generations shareholders will receive 1.108 common shares of ARC Resources for each common share of Seven Generations. The combined company will operate as ARC Resources, headquartered in Calgary.
The combined company will become the largest Montney producer of low-cost natural gas and high-margin condensates, with combined production expected to exceed 340,000 barrels of oil equivalent (boe)/day of production in 2021. It will be gas weighted, with 1.2bn ft3/day of liquids-rich natural gas production and 138,000 b/d of liquids.
The combined company will become Canada’s largest condensate producer, the country’s third largest natural gas producer and sixth-largest upstream energy company.
Industry veteran Hal Kvisle will lead the company as board chair, with Seven Generations’ CEO Marty Proctor as vice chair. Terry Anderson of ARC will be the combined company’s president and CEO, ARC’s Kris Bibby its senior vice president and CFO and Seven Generations’ David Holt its senior vice president and COO.
The transaction is subject to shareholder approval for both ARC Resources and Seven Generations, regulatory approvals and other customary closing conditions. Pending those approvals, it is expected to close in Q2 2021.