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Oil & Gas Talk - MoAr M&A

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Dec 21, 2005
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Oil & Gas Talk - MoAr M&A

I figure it'll be more interesting if there was a list of the deals in the first post :)

June 2014
Crescent Point buying private Viking producer ~$333 mil
Long Run + Crocotta ~$357 mil
Bonavista buying out Cequence's 49% interest ~$140 mil

July 2014
Talisman rumors
Cardinal Energy buying assets for $170mil
Baytex selling ND assets for ~$350mil
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Nov 26, 2005
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nice we finally have fourm that can talk stocks

MMT announce first dividend today 0.10/share, and regular dividend 0.05/share starting next quarter
the regular dividend is close to 16.2% yield at current share price$1.30, even after a 23% daily gain today!
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Any of you lucky bastard who owned PRQ post on RFD? Speak up...

I wish I did. :(

I owned DAY when it was bought out, made nice profit. :cool:
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on the links!
Xiaohaibao wrote: ↑Any of you lucky bastard who owned PRQ post on RFD? Speak up...
I own it. Won't go into details, as I already mentioned it in a previous post
charliebrown wrote: ↑So, instead of complaining about rising gas prices, what are your picks to offset some of the pain at the pumps with dividends and/or cap gains with names in the industry?
Crew Energy.

Beaten up pretty bad, like most other gassy companies. Had it's 52wk low in May. It's a bit of a gamble, we'll see...they're drilling for oil in the Princess, Alberta area.
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Sauerkraut wrote: ↑
Crew Energy.

Beaten up pretty bad, like most other gassy companies. Had it's 52wk low in May. It's a bit of a gamble, we'll see...they're drilling for oil in the Princess, Alberta area.
Yeah, CR and Celtic have been pretty hard hit along with others in the same production size ie Angle (NGL), Nuvista (NVA), Guide (GO).

Interestingly, WTI oil has bounced back from the mid 70s while nat gas is slowly getting back to $3. Yet, quite a few oil abd gas companies are still trading near 52 wk lows.

Names like Zargon, Enerplus and Pengrowth have been hammered as well -- I guess market is betting on dividend cuts (ERF already trimmed its div by 50%)
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charliebrown wrote: ↑Yeah, CR and Celtic have been pretty hard hit along with others in the same production size ie Angle (NGL), Nuvista (NVA), Guide (GO).

Interestingly, WTI oil has bounced back from the mid 70s while nat gas is slowly getting back to $3. Yet, quite a few oil abd gas companies are still trading near 52 wk lows.

Names like Zargon, Enerplus and Pengrowth have been hammered as well -- I guess market is betting on dividend cuts (ERF already trimmed its div by 50%)
no doubt NG price hurt them a lot as they are NG focus.
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More M&A - smaller deal than last week. Wonder if this was the plan all along.

Been waiting for this one as an ONR shareholder :) . Wonder how CQE will respond considering it has been trading below its recent offering price of $1.20 ever since the original CQE-ONR deal was announced

http://www.marketwire.com/press-release ... 676104.htm
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Nov 26, 2005
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ccyk wrote: ↑no doubt NG price hurt them a lot as they are NG focus.
from iv
As liquids prices collapse, Break Even price for NG producers keeps rising

Remember all those producers who can "make money" at $2.50 NG. Well, that was based on the associated "liquids", selling for $60 to $90 a barrel.
"Liquids" at -200 degrees and under pressure...otherwise known as gases heavier than Methane...most definitely NOT OIL.

Now, thanks to a huge glut in "liquids", they are selling at half that price (Ethane, Propane and Butane all have own price).

So, now the breakeven price for many of the best NG producers is closer to $3.50.

The NG price may have risen, but Q2 will be net worse for wet NG producers due to the fall in liquids price.

In the long run, the fall in liquids prices will help the fortunes of dry NG producers, since the break even price for NG will be higher, the less liquids are worth. But in badly hurts the NG producers who sold themselves as having a huge advantage based on liquids content.
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DNO International proposes an all-cash offer to acquire Calvalley Petroleum Inc. for CAD 2.30 per share


Fully funded all-cash offer represents approximately 60 percent premium to Calvalley shareholders
Strategic bolt-on to DNO International's existing Yemen asset base consistent with stated Middle East-North Africa expansion strategy
Provides Calvalley shareholders immediate liquidity and certainty of value

OSLO , July 5, 2012 /CNW/ - DNO International ASA ("DNO International"), the Norwegian oil and gas company, announced today that it intends to make an all-cash offer, through an acquisition entity, to acquire Calgary-based Calvalley Petroleum Inc. ("Calvalley") (CVI-A.TO) at a price of CAD 2.30 per Class A common share (the "Shares").

DNO International's offer represents a premium of approximately 60 percent to the CAD 1.43 closing price of Calvalley Shares on the Toronto Stock Exchange (the "TSX") on 4 July 2012 and approximately 55 percent to the volume weighted average trading price of Calvalley's Shares on the TSX for the past 30 trading days. The proposed transaction represents a market capitalization value of approximately CAD 215 million.

"This offer provides Calvalley shareholders with significant, immediate and certain value for the company's existing assets, as well as recognizing its future growth potential," said Bijan Mossavar-Rahmani, DNO International's Executive Chairman. "We also believe our own shareholders and other stakeholders would be very well-served by the combination of these two businesses."

"For DNO International, this transaction is complementary to our existing Yemen asset base and fits well with our strategy of continuing to build a balanced portfolio of production, development and exploration assets in the Middle East and North Africa ," said Mr. Mossavar-Rahmani. "We believe the combination of Calvalley's portfolio and DNO International's operational capabilities and strong balance sheet position us to enhance value in Yemen through increased production and reserves."

Calvalley's principal assets and operations relate to its 50 percent working interest in the Production Sharing Agreement for Block 9, which consists of a 2,234 square kilometre (552,000 acre) area within the prolific Sayun-Masila Basin in the Republic of Yemen .

Calvalley also owns a 100 percent working interest in a Production Sharing Contract in the Republic of Ethiopia for the Metema and Gimbi blocks covering a total area of 46,470 square kilometres (11.5 million acres).

DNO International currently holds working interests in five assets in Yemen , three of which are in production with Company Working Interest of 4,169 barrels of oil per day ("bopd") in Q1 2012 (approximately 10 percent of DNO International's production) and proved plus probable ("2P") reserves of 10.5 million barrels (approximately 2 percent of DNO International's 2P reserves). On a combined basis, Calvalley would add production of 1,942 bopd (based on Q1 2012 data) and 2P reserves of 29.3 million barrels (as at year end 2011). Block 9 is located within the same area as DNO International's current Yemen assets and operations.

The all-cash offer will not be subject to any financing condition. Macquarie Capital is DNO International's financial advisor and Stikeman Elliott LLP is DNO International's legal advisor.

DNO International first approached Calvalley in late May with the aim of reaching a negotiated transaction to combine the two companies. Written offers to acquire all currently issued and outstanding Shares for CAD 2.30 per share followed with the last letter on 7th June 2012 . Despite continued discussion between the companies and DNO International's best efforts, after a month, the Company has not to date received any meaningful engagement from Calvalley's board of directors or senior management. Given the size of the premium on offer and the potential benefits of the transaction to Calvalley, DNO International felt compelled to bring this offer directly to shareholders.

DNO International expects to commence the offer on or about July 12, 2012 by way of publication of an advertisement and filing of a formal take-over bid circular. The offer will be open for acceptance for a period of 35 days and will expire on or about August 16, 2012 unless extended or withdrawn. Full details of the offer will be included in the formal offer and take-over bid circular to be publicly filed and subsequently mailed to Calvalley's shareholders.

The offer will be subject to certain conditions, including acceptance of the offer by holders of at least 66 2/3 percent of Calvalley's shares (including those held by DNO International and its affiliates) calculated on a fully-diluted basis and at least a majority of the Shares calculated on a fully-diluted basis the votes attached to which would be included in the minority approval of a second-step business combination under applicable securities laws, no change having occurred that is, may be or would have a material adverse effect in relation to Calvalley and receipt of all necessary regulatory approvals.

DNO International ASA is an Oslo-listed, Middle East and North Africa focused oil and gas company holding stakes in 17 licenses in various stages of exploration, development and production both onshore and offshore in the Kurdistan Region of Iraq , the Republic of Yemen , the Sultanate of Oman , the United Arab Emirates and the Tunisian Republic.

http://www.dno.no

Oslo , 5 July 2012

DNO International ASA
Corporate Communications
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ccyk wrote: ↑too bad it is just 1% of my holding :facepalm:
Congrats!

Nice day for Bankers (BNK.TO) as well (+28%)...I think it's up ~100% from about a week ago
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Dividend cut at Pengrowth: http://www.marketwire.com/press-release ... 677164.htm

Good thing I sold my NAL shares...otherwise would be 2 cuts in one year (and they were originally boasting that NAL shareholders will be getting a dividend increase after the merger!)

Wonder who's next...so far, Enerplus and Pengrowth have cut their dividends.
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charliebrown wrote: ↑Dividend cut at Pengrowth: http://www.marketwire.com/press-release ... 677164.htm

Good thing I sold my NAL shares...otherwise would be 2 cuts in one year (and they were originally boasting that NAL shareholders will be getting a dividend increase after the merger!)

Wonder who's next...so far, Enerplus and Pengrowth have cut their dividends.
all the NG heavy producer will cut sooner or later
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ccyk wrote: ↑all the NG heavy producer will cut sooner or later
Actually, the ones who've cut so far are about 50/50 split between nat gas and liquids

PRQ and PEY are pre-dominantly nat gas -- but their share price has been supported since their dividends are not very high. I'm guessing that Bonavista, PennWest & Zargon are next in line (the last two being more oily vs. BNP). Not too sure how to interpret the relatively high level of insider selling at BNP lately.
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charliebrown wrote: ↑Congrats!

Nice day for Bankers (BNK.TO) as well (+28%)...I think it's up ~100% from about a week ago
CA;CVI.A 13:53 2.52 +1.08 +75%

still undervalue, fair value should be $2.7/share+ premium of operatorship of the field.
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charliebrown wrote: ↑Actually, the ones who've cut so far are about 50/50 split between nat gas and liquids

PRQ and PEY are pre-dominantly nat gas -- but their share price has been supported since their dividends are not very high. I'm guessing that Bonavista, PennWest & Zargon are next in line (the last two being more oily vs. BNP). Not too sure how to interpret the relatively high level of insider selling at BNP lately.
pey already had their cut back in 11
those with NGL will feel pain soon I expect.
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ccyk wrote: ↑pey already had their cut back in 11
those with NGL will feel pain soon I expect.
PEY cut their dividend to 6cents/mth upon conversion to a corporate structure at the beginning of 2011 (gas prices fell during 2011, and even more so in 2012). They justified the cut as a move to a "growth" model i.e. investing more on capex vs. dividends (while other former trusts reduced their payout levels to factor in taxes payable).
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charliebrown wrote: ↑PEY cut their dividend to 6cents/mth upon conversion to a corporate structure at the beginning of 2011 (gas prices fell during 2011, and even more so in 2012). They justified the cut as a move to a "growth" model i.e. investing more on capex vs. dividends (while other former trusts reduced their payout levels to factor in taxes payable).
i will give pey's operation team grade A
it is just that their land is so heavy weight in NG.

it is most likely to survive among all NG companies. many others are heavy in debt and will get squeezed out painfully.
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Here's a TD analyst on possible dividend cuts

[PHP]Company Ticker Yield PE Ratio Dividend Dividend TD Probability of Cut
Payout Ratio Per Share
Parallel Energy Trust PLT.UN 16.33% -- 100.00% $0.96 Low probability of a dividend cut
Eagle Energy Trust EGL.UN 10.77% -- 94.20% $1.05 Low probability of a dividend cut
Freehold Royalties FRU 9.68% 18.47 78.09% $1.68 Less than 50% probability of a dividend cut
Enerplus Corp. ERF 18.06% 44.30 68.66% $2.16 Dividend has been cut by 50%
Crescent Point Energy CPG 7.63% 50.97 59.13% $2.76 We do not expect a dividend cut or change to capex budget
Zargon Oil & Gas Ltd. ZAR 14.48% 27.63 56.06% $1.20 Greater than 50% probability of a dividend cut
Baytex Energy Corp. BTE 6.65% 17.88 49.46% $2.64 We do not expect a dividend cut or change to capex budget
Pengrowth Energy PGF 13.55% 26.96 47.29% $0.84 Greater than 50% probability of a dividend cut
Progress Energy ResourcePRQ 3.66% 18.23 45.34% $0.40 Low probability of a dividend cut
ARC Resources Ltd. ARX 6.09% 21.64 41.69% $1.20 Low probability of a dividend cut
Vermilion Energy Inc. VET 5.46% 21.31 40.46% $2.28 We do not expect a dividend cut or change to capex budget
Bonavista Energy Corp. BNP 10.15% 15.42 38.67% $1.44 Less than 50% probability of a dividend cut
Penn West Petroleum PWT 8.38% 9.41 35.41% $1.08 Low probability of a dividend cut
Peyto Exploration & DevePEY 4.05% 19.53 32.47% $0.72 Low probability of a dividend cut
Trilogy Energy Corp. TET 1.99% 175.5 21.01% $0.42 Dividend payout is low and we do not expect a dividend cut

* Data from Globe and Mail [/PHP]

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