Alberta Energy Co. Ltd. (AEC), Calgary, Tuesday said it has agreed to purchase natural gas assets and infrastructure currently held by Ranger Oil. Ltd., Calgary, for $262 million (Can.) in cash if Petrobank Energy & Resources Ltd.'s unsolicited takeover bid for Ranger is successful. Petrobank has agreed to the sale, if certain conditions are met.
Ranger is fighting Petrobank's takeover bid (OGJ Online, May 16, 2000). On Monday, Ranger, which is much larger than Petrobank, reported the data room process is essentially complete and it is issuing bid instructions to interested parties. Ranger has refused Petrobank access to the data room.
A Ranger statement said, "Bids are now being solicited on two bases: for the entire company and for the North American and international businesses in separate parcels." Ranger claims it may complete its negotiations with a successful bidder by mid to late June.
For its part, Petrobank, which has extended its bid to June 19, says it expects to complete the takeover of Ranger by July 31. Petrobank estimates the value of the assets to be sold to AEC represent less than 10% of Ranger's current total production on a boe basis.
The assets include gas properties and infrastructure in Northwest Territories and British Columbia, plus certain shallow-gas assets in northeastern Alberta. These assets are close to AEC properties.
"Our focus has been to grow our North American gas portfolio with high-quality, long-life assets," says AEC Chief Executive Gwyn Morgan. "This deal presents an opportunity to add to our already strong natural gas reserve and production base in western Canada."
Petrobank has agreed to the terms of AEC's offer. The purchase, however, is contingent on Petrobank acquiring two thirds of the outstanding Ranger shares pursuant to the offer and on Petrobank nominees constituting a majority of Ranger's board of directors.
Based on the proposed sale of Ranger assets to AEC, Petrobank said it is looking at ways to improve the terms of its offer for Ranger. The current offer remains at $7.50 (Can.)/share in cash, up to a maximum of $330 million or three common shares of Petrobank for each share of Ranger.
Ranger put itself on the market Apr. 5 in response to shareholder concern over share values. Petrobank made an offer Apr. 6.