Total increases offer for Synenco Energy

Total E&P Canada Ltd. has raised its offer from $9 (Can.)/share to $10.25 (Can.)/share for the Synenco Energy Inc.

Aug 1st, 2008

Uchenna Izundu
International Editor

LONDON, Aug. 1 -- Total E&P Canada Ltd. has raised its offer from $9 (Can.)/share to $10.25 (Can.)/share for the Synenco Energy Inc.

The revised bid values the heavy oil sands company at about $530.5 million (Can.).

Total first expressed interest in Synenco in April to boost its presence in heavy oil sands and find new growth areas. Synenco's assets include the 114,500 b/d Northern Lights oil sands mining and bitumen extraction project.

The Synenco board recommended that shareholders accept the increased offer, which represents a 32% premium over the closing price of $7.79 (Can.)/share on the last trading day prior to the takeover offer.

Total said it signed lock-up agreements with D.E. Shaw Laminar Portfolios and Wellington Management Co. LLP, which both had 23% of Synenco's common shares. Those shares had not been secured under the previous bid. The offer is open to shareholders until Aug. 5 and those who have already deposited their shares will receive the new price.

In Canada, Total operates the Joslyn lease with a 74% interest that will produce 200,000 b/d using surface mining technologies. The production potential of Joslyn is currently estimated at 230,000 b/d.

Total holds a 50% interest in the Surmont lease 60 km southeast of Fort McMurray. Total's share of the aggregate production from Surmont and Joslyn should reach more than 200,000 b/d in the next decade.

Total plans to construct an upgrader in the Edmonton area, which will initially process 140,000 b/d of bitumen before 2015.

Contact Uchenna Izundu at uchennai@pennwell.com.

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