Baytex Energy Corp. and Raging River Exploration Inc., both of Calgary, have agreed to merge in an exchange of 1.36 Baytex shares for each Raging River share.
The combined company will have production, based on first-quarter 2018 averages, of 93,640 boe/d, 83% oil and NGL. Its proved reserves will be 338 million boe, of which 135 million boe is proved, developed, producing.
The company will have equity value of $2.8 billion (Can.), net debt of $2.1 billion, and enterprise value of $4.9 billion.
In the first quarter, Baytex produced an average 69,522 boe/d, Raging River 24,118 boe/d.
Of the combined oil production, 45% was light oil and condensate, 28% heavy oil, and 10% NGL. The production was 62% in Canada and 38% in the US.
The companies expect their combined average production next year to reach 100,000-105,000 boe/d after exploration and development capital investment of $750-850 million.
Retaining the Baytex name, the company will have positions in the Eagle Ford shale oil play in South Texas, East Duvernay shale oil play in central Alberta, Viking light-oil resource play in western Canada, Peace River heavy-oil region of northwestern Alberta, and Lloydminster heavy-oil area along the Alberta-Saskatchewan border.
Neil Roszell, executive chairman and chief executive officer of Raging River, will be chairman of the combined company.
Baytex Pres. and Chief Executive Officer Edward LaFehr and Chief Operating Officer Richard Ramsay will retain those positions in the combined company.
Raging River Pres. Bruce Beynon will join Baytex as executive-vice-president with responsibility for exploration, land, and corporate development.
Jason Jaskela, chief operating officer of Raging River, will join Baytex as vice-president of the East Duvernay shale oil play.