Strathcona Resources has agreed to buy private equity-backed Serafina Energy for $2.3 billion, sources with direct knowledge of the matter said on Wednesday, the largest acquisition yet by the Canadian private oil and gas producer.
Serafina produces 40,000 barrels of oil equivalent (boe) per day in the province of Saskatchewan, while Strathcona is focused on the Montney basin, in Alberta and British Columbia, and produces 110,000 to 115,000 boe per day, mainly liquids.
Strathcona and Serafina did not respond to requests for comment on the deal, which the sources told Reuters is scheduled to close on Aug. 29.
Reuters reported in March that Pine Brook Partners and Camcor Partners were considering selling Serafina.
Meanwhile, Strathcona — owned by Waterous Energy Fund — has been among the top buyers of oil and gas assets in Canada since it formed in 2020, hoping to profit from oil at near or above $100 per barrel since Russia’s invasion of Ukraine.
Serafina commanded a “strong price,” justified by the long life of its assets and good fit geographically for Strathcona, said Tom Pavic, president of Sayer Energy Advisors, which advises on deals for oil and gas producers.
But Canada’s upstream industry overall represents a buyers’ market as small producers struggle to access capital to make acquisitions, Pavic added.
Strathcona announced its purchase of Caltex Resources in March and said it had also acquired Alberta’s Tucker thermal oil field assets in January.
The latest deal in the sector follows Whitecap Resources Inc’s C$1.9 billion purchase of Montney and Duvernay oil and gas assets from U.S. oil major Exxon Mobil Corp and Imperial Oil Ltd, announced in June.
(Reporting by Shariq Khan and Rod Nickel; Editing by Kirsten Donovan and Alexander Smith)