CALGARY – Shareholders in Calgary-based Painted Pony Energy Ltd. have approved its sale to much larger Canadian Natural Resources Ltd. for 69 cents per share.
The company says more than 86 per cent of its shares were voted in favour of the friendly takeover deal announced in August through which Canadian Natural will pay $111 million in cash and assume $350 million in debt.
The buyer, best known for its heavy oil and oilsands production, has said the purchase will allow it to grow its position in the liquids-rich Montney natural gas region of northeastern B.C.
Canadian Natural is one of the largest natural gas producers in Canada. It considers gas output a hedge against costs in its oilsands operations, which consume large amounts of the fuel.
Painted Pony has said three years of weak gas prices and more recent declines in prices for the petroleum liquids produced with the gas led to liquidity problems and forced it to commence a confidential process to enhance shareholder value, resulting in the Canadian Natural offer
Painted Pony produced about 279 million cubic feet per day of natural gas and 4,400 barrels per day of petroleum liquids in the second quarter, compared with Canadian Natural’s output of 1.46 billion cubic feet per day of gas and 922,000 bpd of crude oil and liquids in the second quarter.
The transaction is expected to close next week following court approval.
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