Gulf Canada Resources Ltd. and Home Oil Ltd., both of Calgary, have agreed to merge in a $492 million deal.
Gulf will buy a 22.8% interest in Interhome Energy Inc., Home's parent, from Imperial Oil Ltd., Toronto. Gulf and Home will then merge.
Interhome also owns Interprovincial Pipe Lines Ltd., Edmonton, which operates a major crude oil pipeline from Alberta to Central Canada.
The merger will create a firm that will be third in crude oil production and fifth in natural gas production in Canada.
Current assets are about $2.3 billion for Gulf and $2.9 billion for Interhome.
The merger will in effect separate the pipeline and exploration/production operations of Interhome into separate public companies.
The merger is subject to shareholder and regulatory approval.
Gulf plans to pay for the purchase with short term loans it expects to pay off from proceeds of a $300 million asset sale that includes a 10% interest in Caroline gas field north of Calgary.
Olympia & York Ltd., a Toronto development company with extensive energy interests, is a major player in the deal. O&Y owns 74% of Gulf and about 36% of Interhome through another subsidiary, GW Utilities Ltd.
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