Connacher Oil and Gas Ltd., Calgary, (Toronto: CLL) plans to acquire Luke Energy Ltd., Calgary, (Toronto: LKE) for C$2.31 in cash and 0.75 of a common share of Connacher per share of Luke. Closing of the acquisition is expected by mid-March. GMP Securities LP is advisor to Luke. This acquisition will provide Connacher with a low-risk shallow-gas project in north-central Alberta, prospective acreage, drillable prospects and opportunities in other regions of the province. The transaction will also allow Connacher to continue its strategy of hedging its initial gas requirements for its Great Divide oil-sands project in northeastern Alberta. The combined company will have production of approximately 3,500 barrels of oil equivalent per day and oil-sands reserves of approximately 79.3 million barrels equivalent, including 69.6 million probable recoverable barrels of bitumen reserves at Connacher's Great Divide Pod 1. The cash portion of the acquisition will be funded with a bridge loan from a major international bank.
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