Canadian oil producer Whitecap Resources Inc. said Aug. 31 it would buy NAL Resources Ltd., owned by Manulife Financial Corp, for CA$155 million (US$118.59 million) as it looks to boost its core Alberta and Saskatchewan assets.

Whitecap said it would issue 58.3 million of its shares to Manulife in exchange for all the issued and outstanding shares of NAL, which operates in Canada's Saskatchewan and Alberta.

Insurance and financial services provider Manulife will own about 12.5% of the combined company.

The deal marks growing interest in mergers among smaller Canadian oil producers to bolster their portfolios, as uncertainty about future oil demand persists.

The COVID-19 pandemic destroyed fuel demand and left dozens of energy companies without the prospect of drilling their way out of debt or bankrupt, making consolidations a viable solution for many smaller players.

Separately on Aug. 31, Calgary, Alberta-based oil and gas company Obsidian Energy Ltd. offered two shares for every share of Bonterra Energy Corp.

That would value Bonterra at about C$35 million, or C$1.06 per share, a 29.3% discount to its close on Aug. 28. Bonterra shareholders would own about 48% in the combined company, Obsidian said.

Last month, top independent U.S. oil producer ConocoPhillips Co. said it would buy land from Kelt Exploration Ltd. in Canada's Montney shale oil play in a $375 million deal. (US$1 = $1.3070 Canadian dollars)

Onshore