M&A / High Point Energy
High Point Energy to Buy Mesquite Exploration for C$53.2 Mln
By Joe Schneider
Calgary, April 20 (Bloomberg) -- High Point Energy Corp., a Canadian oil and gas exploration company, agreed to buy rival Mesquite Exploration Ltd. for about C$53.2 million ($33.8 million) in stock and assumed debt to add natural-gas production.
High Point will assume C$19.5 million of Mesquite's debt and issue 56.2 million shares for the balance, the companies said in a Canada NewsWire release.
High Point wants Mesquite's natural-gas properties and reserves to raise its natural-gas holdings to 80 percent of total assets. It plans to sell Mesquite's oil properties at Mitsue, Progress and Utikuma, Alberta, and Lloydminster, Saskatchewan, which it valued at about C$15 million.
Mesquite produces 1,800 barrels of oil equivalents a day, including 2.5 million cubic feet of gas.
High Point said holders of 70 percent of Mesquite shares have agreed to tender their stock. High Point also plans to consolidate its shares on a one-for-three basis and change its name once the purchase is complete.
Mesquite has agreed to pay C$1 million, under certain circumstances, if the acquisition isn't completed. Mesquite was advised by Griffiths McBurney & Partners.
High Point rose 4 Canadian cents, or 7.1 percent, to 60 cents yesterday. Mesquite rose 7 cents, or 5.6 percent, to C$1.32. Both companies are based in Calgary. |
