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ARC Resources to merge with Seven Generations in all-stock deal

February 11, 20217:14 AM Reuters0 Comments

ARC Resources Ltd and Seven Generations Energy Ltd have entered a $8.1 billion all-stock merger agreement that will create Canada’s sixth-largest energy company.

The combined company will become the biggest operator in Western Canada’s premier Montney shale play, producing more than 340,000 barrels of oil equivalent per day (boepd).

It will be Canada’s largest condensate producer and third-largest producer of natural gas, operating under the name of ARC Resources Ltd and remaining headquartered in Calgary.

Canadian oil and gas companies struggled last year as the coronavirus pandemic battered demand but prices have rebounded in 2021 amid optimism about vaccine rollouts and concerns of an oil supply shortage.

“The transaction will create a combined company with material size and scale that enhances ARC’s and Seven Generations’ existing commodity and geographic diversification,” the companies said in a statement.

Under the terms of the definitive agreement, Seven Generations shareholders will receive 1.108 common shares of ARC for each common share of Seven Generations held.

The deal is expected to be immediately accretive on a free funds flow and net asset value per share basis to all shareholders, the companies said. It is also expected to deliver annual cost savings of C$110 million by 2022.

ARC’s Terry Anderson will be president and chief executive of the combined company. 29dk2902l

ARC Resources Seven Generations Energy

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