CALGARY – Insolvent junior oilsands producer Connacher Oil and Gas Ltd. says a buyout bid by East River Oil and Gas Ltd. has been selected in a court-supervised sales process.
Documents show East River would pay $113.5 million to buy Connacher if the deal is approved by the courts and company creditors later this year.
The transaction would allow Connacher to exit Companies’ Creditors Arrangement Act protection after more than two years.
The sales process was launched in March after court approval of a deal between the Calgary-based company and its first-lien lenders, who were owed about $141 million.
Investment bank Houlihan Lokey Capital Inc. of Los Angeles was hired to solicit proposals that would provide net sale or investment proceeds of at least $90 million, plus an amount sufficient to pay other claims with similar ranking to the first-lien debtholders.
Under the agreement, if no qualified bidder emerged, the company was to be sold to the lenders in return for cancellation of some of what they are owed.
An attempt to sell the company soon after it filed for court protection in 2016 attracted several bids, but Connacher and its lenders found none was acceptable.
In its most recent quarter, the company reported a net loss of $57.2 million and bitumen production of 12,670 barrels per day.