By OGJ editors
HOUSTON, Mar. 3 -- Connacher Oil & Gas Ltd., Calgary, has agreed to buy the 8,000 b/d Montana Refining Co. refinery and other assets in Great Falls, Mont., from Holly Corp., Dallas.
It will pay $55 million and 1 million shares of its common stock valued at $4.6 million. The companies expect to close the deal by Apr. 1.
Connacher's main asset is a 100% interest in 68,480 acres of oil sands leases near Fort McMurray, Alta., which it calls the Great Divide project. It is seeking regulatory approval for development via steam-assisted gravity drainage (SAGD).
It also has producing interests in Saskatchewan and retains a 35% interest in Petrolifera Petroleum Ltd., a Latin American producer it took public in an initial public offering last year.
Last Month, Connacher signed an agreement to acquire Luke Energy Ltd., an Alberta gas producer, for cash and stock. It said the acquisition, which is to close Mar. 16, will "hedge its anticipated initial requirements for natural gas to create steam for its proposed SAGD operations at Great Divide."
The company will buy the Montana refinery through a subsidiary, Montana Refining Co. Inc. It said the purchase will provide "protection against the wider and more volatile crude oil price differential swings which have become increasingly frequent in a higher oil price environment for heavy oil such as would be produced at Great Divide."
Holly subsidiaries operate a 75,000 b/d refinery in Artesia, NM, and a 26,000 b/d refinery in Woods Cross, Utah.