Canadian Natural Resources Ltd., Calgary, has agreed to acquire Storm Resources Ltd., Calgary, for a cash consideration of $6.28 (Can.) per share. Canadian Natural Resources will also assume Storm’s total debt, working capital deficit and other monetary obligations of about $186 million (Can.).
The purchase price implies an enterprise value for Storm of about $960 million (Can.) including transaction related expenses and decommissioning obligations, Storm said.
Current production, before royalties, to be acquired by Canadian Natural, is about 136 MMcfd of natural gas and 5,600 b/d of NGLs. The assets include properties in the high quality, liquids rich Montney area of Northeast British Columbia.
The agreement contains customary representations and warranties of each party and interim operational covenants by Storm. It also provides for, among other things, customary support and non-solicitation covenants by Storm, subject to a "fiduciary out" for unsolicited "superior proposals" in favor of Storm and a provision for the right to match any superior proposals in favor of the purchaser.
The deal provides for a non-completion fee of $43.5 million (Can.), payable if the transaction is not completed or is terminated in certain circumstances, including if Storm enters into an agreement with respect to a superior proposal or if the board withdraws or modifies its recommendation with respect to the transaction.
The deal is expected to close in December.
Canadian Natural is an oil and natural gas production company with operations in core areas in Western Canada, the UK sector of the North Sea, and offshore Africa.
