Alberta Energy, PanCanadian announce $27 billion (Can.) merger

By the OGJ Online Staff

HOUSTON, Jan. 28 -- Alberta Energy Co. Ltd. (AEC) and PanCanadian Energy Corp. plan to merge during April into a $27 billion (Can.) company to be called EnCana Corp.

The Calgary-based companies said the "merger of equals" would be under the Business Corporations Act of Alberta. Holders of AEC common stock will get 1.472 shares of PanCanadian for each of their AEC shares. On completion of the transaction, PanCanadian shareholders will own 54% and AEC stockholders 46% of EnCana.

The boards of both companies have endorsed the deal, which is subject to stockholder approval and clearance from the Court of Queen's Bench of Alberta and regulatory authorities. The transaction is expected to close in early April.

David O'Brien, PanCanadian chairman and CEO, will be EnCana's non-executive chairman and Gwyn Morgan, AEC president and CEO, will fill the same posts at the combined company. EnCana's board will consist of an equal number of directors from each company.

AEC and PanCanadian said the merged company would be the world's largest independent oil and gas company in terms of enterprise value, reserves, and production.

It would be the third largest publicly traded industrial company in Canada with one of the largest capital investment programs of any Canadian-headquartered company.

O'Brien said, " EnCana will have one of the most attractive internal growth profiles in the industry, given the excellent strategic asset fit and the magnitude and complementary nature of our growth prospects. AEC brings unparalleled near-term and medium-term internal growth from North America and Ecuador, while PanCanadian brings near-term growth in Western Canada and prospects for very strong long-term growth from eastern Canada and the North Sea."

Morgan said, "Our strong balance sheet will enable us to both optimize our capital investment program through the drillbit and to pursue selective acquisitions. We will have the size and technical capabilities to manage the challenges associated with developing high-impact North American and offshore projects. I am extremely confident that we can manage our combined assets and resources to create more profitable growth and higher shareholder returns than either company could achieve on a stand-alone basis."

The companies said within a year the merger will result in a pretax cost savings of $250 million/year from efficiencies in overlapping operations, streamlining business practices, improving procurement practices, building a common information technology base, and incorporating best practices.

The companies also expect to achieve capital program synergies of an additional $250 million/year.

The combined company will have six core growth areas: the Western Canadian Sedimentary Basin (natural gas and oil), offshore East Coast Canada (natural gas), the US Rocky Mountain region (natural gas), the US Gulf of Mexico (oil), the UK Central North Sea (oil), and the Oriente basin of Ecuador (oil).

EnCana also will have exploration activities in the Canadian North, Alaska, Australia, Azerbaijan, the Middle East, and Brazil.

The combined company will have reserves of 7.8 tcf of gas and 1.3 billion bbl of oil and liquids, equaling 2.6 billion boe. Production targets for 2002 are 2.7 bcfd and 255,000 b/d of oil and liquids, or 700,000 boe/d. The 2005 goal is 1.1 million boe/d, a 55% increase from the 2002 production forecast.

EnCana's 2002 capital investment program will be $3.8 billion.

In North America, the merged company will be the largest independent gas producer and the largest independent gas storage operator.

It will have an exploration land base of 23 million acres, including large positions in Canada's Western Basin and East Coast Scotian Shelf. The combined company holds interests in more than 200 blocks in the deepwater Gulf of Mexico and has significant oil sands and coalbed methane interests. Officials plan to drill more than 2,800 exploration and development wells in 2002.

EnCana will have more than $2 billion in combined North American midstream and marketing assets, consisting of energy services, gas storage, natural gas liquids extraction, pipelines, and power generation.

Related Articles

AER shuts in 16 Murphy Oil sites in Peace River region for noncompliance

07/07/2015 Alberta Energy Regulator said it has shut in or partially shut in 16 sites operated by Murphy Oil Co. Ltd. in the Peace River region. The sites wer...

WAFWA: Aerial survey finds lesser prairie chicken population grew

07/06/2015 A recent range-wide aerial survey found the lesser prairie chicken population rose 25% from 2014 to 2015, the Western Association of Fish & Wil...

Production ramps up from Sunrise oil sands project

07/06/2015 Husky Energy Inc., Calgary, reported that 25 well pairs are now on production at its Sunrise oil sands project in northeastern Alberta. Steaming is...

Buru awarded onshore Canning licenses

07/06/2015 Buru Energy Ltd., Perth, and Mitsubish Corp. have been granted two production licenses for Ungani oil field in the onshore Canning basin of Western...

Cenovus sells royalty business for $3.3 billion

07/06/2015 Cenovus Energy Inc., Calgary, inked an agreement to sell its wholly owned subsidiary Heritage Royalty LP to Ontario Teachers’ Pension Plan for gros...

CERI: Energy, operational efficiencies possible in Canadian oil, gas

07/06/2015 Measures can be taken by operators in the expanding resource-intensive Canadian oil and gas sector to improve both energy efficiency and operationa...

AGL Energy to scale back upstream gas operations


Gas retailer AGL Energy Ltd., Sydney, says it will exit the oil business and massively scaling back its upstream gas operations.

Macondo settlement seen ‘positive’ for BP

07/06/2015 BP Exploration & Production Inc.’s recent agreement to settle federal and state claims related to the 2010 Macondo blowout and spill improves t...

The price of oil and OPEC-history repeating?

07/06/2015 The world oil market today is characterized by a standoff between the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers a...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by
Available Webcasts

Better Data, Better Analytics, Better Decisions

When Tue, Oct 27, 2015

The Oil & Gas industry has large amounts of data stored in multiple systems which are purpose built for certain tasks. However, good decisions require insights based upon the data in all of these systems. These systems in turn do not talk to each other. So the process of analyzing data, gaining insights, and making decisions is a slow one and often a flawed one. Good decisions require accurate analytics and accurate analytics require superior/sustainable data quality and governance. This webinar focuses on:

  • The importance of data quality and governance
  • How technological advances are making data quality and governance sustainable in order to get the accurate analytics to make solid decisions.

Please join us for this webcast sponsored by Seven Lakes Technologies and Noah Consulting.


Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected