Brian Zinchuk is editor and owner of Pipeline Online
This is the Strathcona Resources Meota West SAGD facility, as seen in September, 2022. Photo by Brian Zinchuk
CALGARY – Strathcona Resources Ltd., which has major operations in northwest Saskatchewan, announced that it would be acquiring Pipestone Energy Corp. in an all-share transaction.
The Aug. 1 announcement is the sixth acquisition since January, 2020, by what used to be known as Cona Resources. The most recent, Serafina Energy, took place roughly a year ago.
Pipestone’s core operating area is near Grande Prairie, in the Montney play.
The amalgamation will continue to operate under the name Strathcona Resources Ltd. Following completion of the transaction, existing Pipestone shareholders will receive approximately 9.05% of the pro forma equity in AmalCo on a fully-diluted basis (approximately 8.87% basic), equating to an exchange ratio of 0.067967 AmalCo shares per Pipestone share. Existing Strathcona shareholders, comprised of Waterous Energy Fund (“WEF”) (99.7%) and Strathcona employees (0.3%), will own the balance. The exchange ratio implies an initial market capitalization of approximately C$8.6 billion, which, when combined with approximately C$2.9 billion in pro forma debt outstanding on closing of the Transaction, equates to an initial enterprise value of approximately C$11.5 billion.
- 0084 EMP Metals Pipeline Online0084 EMP Metals Pipeline Online
- 0053 Kingston Midstream Westspur Alameda Click0053 Kingston Midstream Westspur Alameda Click
- 0082 CsHM 2024 Pipeline0082 CsHM 2024 Pipeline
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0076 Latus only0076 Latus only
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0055 Smart Power Be Smart with your Power office0055 Smart Power Be Smart with your Power office
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0046 City of Estevan This is Estevan0046 City of Estevan This is Estevan
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0011
- 0006 JK Junior
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001
Pro forma for the transaction, Strathcona will be the fifth largest oil producer in Canada, with current production of approximately 185,000 boepd (70% oil / condensate, 78% total liquids), across three concentrated core areas: Cold Lake Thermal (55,000 bpd), Lloydminster Heavy Oil (55,000 bpd) and Montney (75,000 boepd).
Adam Waterous, executive chairman of the board of directors of Strathcona and chief executive officer of WEF, said in a release, “Over the last six and half years we have built Strathcona from 5,000 boepd to 185,000 boepd through a combination of organic growth and complementary acquisitions. In doing so we have employed a value investing strategy to grow per share intrinsic value while maintaining a margin of safety. We are excited to continue building Strathcona within the public markets and believe that now is an attractive time to be growing an oil and gas business in Canada.”
- 0084 EMP Metals Pipeline Online0084 EMP Metals Pipeline Online
- 0053 Kingston Midstream Westspur Alameda Click0053 Kingston Midstream Westspur Alameda Click
- 0082 CsHM 2024 Pipeline0082 CsHM 2024 Pipeline
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0076 Latus only0076 Latus only
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0055 Smart Power Be Smart with your Power office0055 Smart Power Be Smart with your Power office
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0046 City of Estevan This is Estevan0046 City of Estevan This is Estevan
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0011
- 0006 JK Junior
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001
Rob Morgan, president and chief executive officer of Strathcona, said, “We are excited about the acquisition of Pipestone, which fits hand-in-glove with our existing condensate-rich Alberta Montney properties and provides a natural hedge to the natural gas and condensate consumed in our Cold Lake Thermal and Lloydminster Heavy Oil operations. We look forward to welcoming Pipestone’s public shareholders as our new partners and growing per share value for them.”
Dustin Hoffman, Pipestone COO and interim CEO, stated, “The acquisition of Pipestone by Strathcona reflects the successful culmination of growing and delineating our asset base over the past four years. This all-share transaction delivers shareholders ongoing exposure to one of the largest, well diversified, upstream producers in North America, which has the capacity to grow its production meaningfully over the next decade.”
Gord Ritchie, chairman of the board of directors of Pipestone, said in a release, “We are excited to be combining Pipestone with Strathcona, creating a new Canadian oil and gas champion with long-life reserves, significant growth potential, and low sustaining breakevens. We are proud to have grown Pipestone from 152 boepd to 35,162 boepd in just four short years, and now the combination with Strathcona allows Pipestone shareholders to share in future growth and value creation for decades. This transaction is the culmination of a thorough strategic review conducted by the special committee of the board of the directors of Pipestone which concluded that the combination with Strathcona created the strongest value creation opportunity for Pipestone shareholders versus both the status quo and other available alternatives.”
- 0084 EMP Metals Pipeline Online0084 EMP Metals Pipeline Online
- 0053 Kingston Midstream Westspur Alameda Click0053 Kingston Midstream Westspur Alameda Click
- 0082 CsHM 2024 Pipeline0082 CsHM 2024 Pipeline
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0076 Latus only0076 Latus only
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0055 Smart Power Be Smart with your Power office0055 Smart Power Be Smart with your Power office
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0046 City of Estevan This is Estevan0046 City of Estevan This is Estevan
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0011
- 0006 JK Junior
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001