Nuvista Energy acquires Rider Resources; boosts oil and gas production

Source: Exec Digital Canada

Date :1/8/2008 4:11:57 AM

Canadian oil and natural gas exploration company NuVista Energy Ltd. will acquire Rider Resources Ltd. for shares worth about C$287 million to boost oil and gas production and to expand its land base.

Under the terms of the agreement, which has been unanimously approved by the Board of both NuVista and Rider, NuVista will offer 0.354 of a share for each Rider share, valuing the Rider stock at C$5.07 based on NuVista's closing price on Friday of C$14.33.

The offer represents a 25 percent premium to Rider's closing share price on Friday.

Production

NuVista who operates in Alberta and Saskatchewan said the acquisition will add 11,500 barrels of oil equivalent per day of production to the 13,590 boed it averaged in the third quarter, and boost its proved and probable reserves by 33 million barrels of oil equivalent.

It will also bring 155,000 acres of new exploration properties.

Financing

Ontario Teachers' Pension Plan, Canada's third largest fund with net assets of C$106 billion, is backing NuVista's acquisition.

It has agreed to buy six million NuVista units at C$14 each, for a total C$84 million, in a private placement. The units include one share and half a warrant, allowing the fund to buy a share for C$15.50.

The pension fund already owns 9.8 percent of NuVista's stock. The new shares will boost its stake in the firm to 14 percent and approximately 17 percent assuming the exercise of the common share warrants.

The acquisition is expected to close March 13 and requires the approval of two-thirds of Rider's shareholders and a majority of NuVista's investors.

January 08, 2008