Whitecap Resources to acquire Kicking Horse Oil & Gas for $239m

Whitecap Resources acquisition of Kicking Horse Oil & Gas : Canadian oil company Whitecap Resources has signed a cash-cum-stock deal worth CAD300 million ($239.4 million) to acquire Kicking Horse Oil & Gas.

Based in Calgary, Kicking Horse Oil & Gas is an indirect subsidiary of US-based private equity firm Quantum Energy Partners.

The consideration is made up of 34.5 million shares of Whitecap Resources and CAD56 million ($44.7 million) in cash and the assumption of CAD54 million net debt of Kicking Horse Oil & Gas, as of 28 February 2021.

The assets of Kicking Horse Oil & Gas mainly consist of a condensate rich Alberta Montney development, located at Kakwa. Its current production is around 8,000 boe/d.

On the other hand, Whitecap Resources boasts of a significant light oil resource base with operations in Northern Alberta and British Columbia, Central Alberta, Western Saskatchewan, and Eastern Saskatchewan.

Whitecap Resources acquisition of Kicking Horse Oil & Gas. Photo courtesy of John R Perry from Pixabay.

Commenting on Whitecap Resources acquisition of Kicking Horse Oil & Gas, Steve Harding – Kicking Horse Oil & Gas CEO said: “I’m proud of what our team has accomplished, building a world class asset with strong returns and an attractive free cash flow profile, especially in a challenging energy environment.

“We see this asset base as another significant facet of the expanding Whitecap footprint which will benefit from the advantages of scale as part of a larger franchise.”

Whitecap Resources will look to spend CAD75 million on the assets of Kicking Horse Oil & Gas this year, which includes the completion of four wells that are currently being drilled and the drilling of half a dozen more wells.

Of the 10 wells, six of them are anticipated to begin production by the end of 2021.

Grant Fagerheim – Whitecap Resources President and CEO, commenting on Whitecap Resources acquisition of Kicking Horse Oil & Gas, said: “We are excited about adding this asset to our portfolio as an advancement of our Montney growth strategy, creating an additional opportunity for our team to further generate strong returns for our shareholders.

“As we have integrated the NAL and TORC assets over the past several months, our team’s execution has been exceptional, and we are confident that will remain the same with this new asset. We would like to thank our employees for their continued diligent efforts as well as our shareholders, now including Quantum, for your ongoing support.”

Subject to Kicking Horse Oil & Gas’ shareholders’ approval, regulatory approvals, and other customary closing conditions, Whitecap Resources acquisition of Kicking Horse Oil & Gas is expected to be wrapped up by the end of May 2021.