Canadian Natural Resources to acquire Painted Pony Energy

Canadian Natural Resources Ltd. has agreed to acquire Painted Pony Energy Ltd. for a cash consideration of $0.69 per share plus assumption of Painted Pony’s total debt of $350 million.

Current production, before royalties, acquired by Canadian Natural, is 270 MMcfd of natural gas and 4,600 b/d of NGLs. The assets include properties in the Northeast British Columbia areas of Blair, Daiber, Kobes, and Townsend.

The deal strengthens Canadian Natural’s natural gas assets and production base in key operating areas and “allows us to further insulate against natural gas costs in our oils sands operations,” said Tim McKay, president, Canadian Natural Resources.

The transaction is targeted to close late in this year’s third quarter or early fourth quarter, subject to normal closing conditions, including court approval and approval by Painted Pony security holders at a meeting to be held in September.

The arrangement agreement contains customary representations and warranties of each party and interim operational covenants by Painted Pony. The arrangement agreement also provides for, among other things, customary support and non-solicitation covenants by Painted Pony, subject to a “fiduciary out” for unsolicited “superior proposals” in favor of Painted Pony and a provision for the right to match any superior proposals in favor of the purchaser, as well as a non-completion fee of $20 million, payable in the event that the deal is not completed or is terminated in certain circumstances, including if Painted Pony enters into an agreement with respect to a superior proposal or if the board withdraws or modifies its recommendation with respect to the transaction.