Shareholders voted in favour Wednesday of a proposal which will see privately held Strathcona buy them out in an all-stock deal, creating a combined company with an initial market capitalization of
The merger had been opposed by dissident shareholder
Under the terms of the deal, Pipestone shareholders will receive 9.05 per cent of the equity in the merged company, while Strathcona — one of
"The arrangement will enable shareholders to participate in the upside of a much larger and more diversified producer with a well-positioned reserves base and much longer reserves life," said
Strathcona Resources is owned by
The companies say the new merged company will have current production of approximately 185,000 barrels of oil equivalent per day across the
"No one is creating deals like this," said
He said Strathcona's bold M&A strategy is unique in the Canadian market right now, as most companies are still behaving conservatively in the wake of the 2020 oil price downturn.
"I think we'll eventually see it leak into other areas of the Canadian (oil and gas producer) space once others see their success," Smead said.
Strathcona's executive chair
Global oil prices have climbed 30 per cent since
The merged company will retain the Strathcona Resources name and will be led by Strathcona executive chair
The merger is expected to close
This report by The Canadian Press was first published
Companies in this story: (TSX:PIPE)
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