Penn West Energy to acquire Canetic Resources

Penn West Energy Trust announced that it would buy fellow Canadian trust Canetic Resources Trust. The combined company, to be called Penn West, will have production of 200,000 boe/d.

By OGJ editors
HOUSTON, Nov. 8 -- Penn West Energy Trust announced that it would buy fellow Canadian trust Canetic Resources Trust. The combined company, to be called Penn West, will have production of 200,000 boe/d.

The transaction is valued at about $3.6 billion (Can.). The combined assets will include interests in Western Canada's conventional oil and natural gas pools and also will include oil sands, coalbed methane, shale gas, and enhanced oil recovery projects.

Closing, subject to regulatory approvals, is expected during January 2008. The combination is subject to approval of at least two thirds of Canetic unitholders.

Penn West unitholders will own 67% of the combined trust, and Canetic unitholders will own 33%.

Terms call for Canetic unitholders to receive 0.515 of a Penn West unit for each Canetic unit on a tax-deferred basis for Canadian and US tax purposes.

Canetic unitholders are scheduled to receive $15.84/unit for every Canetic unit based on the closing price of Penn West units on the Toronto Stock Exchange as of Oct. 30.

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