A plan by Purcell Energy Ltd. (Toronto: PEL) to buy fellow Calgary-based producer BelAir Energy Corp. (Toronto: BEC) is hoped to revise Purcell's risk profile with additional core reserves and production. Purcell's offer is C$60 million of cash and stock and including C$22.5 million of assumed debt. BelAir shareholders will receive 0.354 Purcell share and C$0.10 cash per BelAir share. BelAir shareholders would own 29% of the combined company. "We did the whole deal in 10 days, working day and night," says Jan Alston, Purcell president and chief executive officer. "We finally had an opportunity to do a value-added deal, our largest yet." BelAir had been for sale for some time and had not had the right offer yet, Alston adds. "At the last moment we were able to do something." Purcell did the deal partly to add lower-risk production and cash flow to its operating and financial mix, while it continues to explore in British Columbia, Alston says. BelAir brings Purcell more stability and reduces its Fort Liard, Northwest Territories, production from 60% of the company total to 40%. Purcell is participating in the Fort Liard exploration and development program in a joint venture with ChevronTexaco (NYSE: CVX). BelAir's production is concentrated in four core areas that are complementary to Purcell's existing operations: Turin in southern Alberta, Penhold in central Alberta, Doris in northern Alberta and Clarke Lake in northeast British Columbia. BelAir's 2002 fourth-quarter production averaged 2,090 BOE per day, 80% gas. Its proved reserves at year-end totaled 5.5 million BOE; established reserves, 7.3 million. The combined company will have production of more than 6,000 BOE per day, 80% gas; proved reserves of 15 million BOE and established reserves of 19 million BOE; undeveloped land-holdings in western Canada of more than 300,000 net acres; and an estimated market cap of more than C$100 million. The purchase price is C$31,500 per flowing BOE per day; C$12.65 per BOE of proved reserves; and C$10.40 per BOE of established reserves. FirstEnergy Capital Corp. was financial advisor to BelAir. Cosco Canada Ltd. was exclusive financial advisor, and Salman Partners Inc. acted as strategic advisor to Purcell. -Jodi Wetuski