Paramount Energy Trust, Calgary, (Toronto: PMT-UN) plans to acquire Profound Energy Inc., Calgary, (Toronto: PFX) in a deal valued at approximately C$112.9 million in cash, units and assumed debt.
Paramount will offer either C$1.34 in cash, 0.394 Paramount unit or a combination of approximately C$0.395 in cash or 0.278 trust unit per Profound share. Paramount is expected to issue 10.6 million units valued at approximately C$36.4 million, C$15 million in cash and assume C$61.5 million in debt.
Profound has assets in west-central Alberta, including 77.75 net sections (47,000 net acres) of crown lands prospective for the Montney, Halfway, Doig and Nikinassin formations. Production is approximately 3,000 barrels of oil equivalent (18 million cubic feet of gas equivalent) per day.
Pro forma, Paramount’s production is expected to be 32,167 barrels equivalent per day. Proved and probable reserves will increase 15% to 560.7 billion cubic feet equivalent (93 million barrels equivalent). The trust’s reserves to production ratio will increase by approximately 4% to a reserve life index of eight years.
Paramount president and chief executive Sue Riddell Rose says, “This is an important strategic acquisition for Paramount, providing not only solid base production but also an operating foothold in the Pembina area with exposure to resource style gas plays that provide an attractive supplement to our prospect inventory. We are excited to have the support of Profound's management and board of directors to acquire this suite of assets which we believe is highly prospective.”
Profound president and CEO Bill Davis says, “The acquisition of Profound by Paramount provides an excellent opportunity for shareholders to benefit from a premium offer as well as share in the exciting potential of the combined PET and Profound assets.”
BMO Capital Markets is financial advisor to Paramount. FirstEnergy Capital Corp. is financial advisor to Profound.
Paramount plans to mail the offer by April 24 and the deal is expected to close by late May.
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