Friday, September 4th10.4°C
27420
27125

Baytex Energy to buy Texas-focused Aurora Oil and Gas for $2.6 billion

CALGARY - Baytex Energy Corp. is expanding into the lucrative Eagle Ford shale through its $2.6-billion acquisition of Aurora Oil & Gas Ltd.

The deal, which was announced Thursday, includes $744 million in Aurora's debt and gets Calgary-based Baytex nearly 9,000 net contiguous hectares in the Sugarkane Field in South Texas in the core of the oil-rich Eagle Ford.

Aurora's production during the last three months of 2014 averaged 24,678 barrels of oil equivalent per day, which was mostly light, high-quality crude oil. The formation's proximity to the U.S. Gulf Coast — a massive refining market — means crude from there fetches strong prices.

"Baytex will acquire premier acreage in the core of the Eagle Ford, one of the leading shale oil plays in the U.S. The acquisition is an excellent fit with our existing business model and positions Baytex in another world-class oil resource play," CEO James Bowzer said in a release.

"The acquisition will provide our shareholders with exposure to low-risk, repeatable, high-return projects with leading capital efficiencies."

Once the deal closes, Baytex's core operating areas will include the Eagle Ford, Peace River oilsands in northwestern Alberta and Lloydminster heavy oil near the Alberta-Saskatchewan border. At that point, its total production is expected to be 85,000 barrels of oil per day.

With the Aurora assets in its arsenal, Baytex will be 53 per cent weighted toward heavy oil, 34 per cent toward light oil and 13 per cent weighted to natural gas. The current breakdown is 75 per cent heavy oil, 14 per cent light oil and 11 per cent natural gas.

Most of the Eagle Ford acreage included in the deal is operated by a subsidiary of Marathon Oil Corp.

Aurora, whose head office is in Australia, trades on the Australian and Toronto stock exchanges.

To help pay for the deal, Baytex has raised $1.3 billion in a bought-deal financing with a syndicate of underwriters co-led by Scotiabank and RBC Capital Markets.

Shares in Baytex, which announced the deal after markets closed, were up one per cent at $41.63 Thursday on the Toronto Stock Exchange.

Follow @LaurenKrugel on Twitter

The Canadian Press


Read more Business News

27218


Recent Trending




Today's Market
S&P TSX13596.41+51.16
S&P CDNX553.75+3.70
DJIA16374.76+23.38
Nasdaq4733.50-16.48
S&P 5001951.13+2.27
CDN Dollar0.7563-0.0016
Gold1123.40-0.30
Oil46.54-0.21
Lumber233.30-0.70
Natural Gas2.706-0.019

 
Okanagan Companies
Pacific Safety0.22+0.00
Knighthawk0.010.00
QHR Technologies Inc1.24+0.05
Cantex0.04-0.01
Anavex Life Sciences1.11-0.14
Metalex Ventures0.05-0.00
Russel Metals21.09+0.22
Copper Mountain Mining0.60-0.01
Colorado Resources0.075-0.010
ReliaBrand Inc0.0045+0.0005
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.08-0.01
Decisive Dividend Corp2.50-0.12

 



27218

FEATURED Property
181034116266 Commonage Road
10092231 bedrooms
$379,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Where does the money go?

Photo: Thinkstock.comOne of the major components of business relationships that involve money are the fees in the investment industry. There is currently a quiet battle being waged between the practit...


Agree to ask questions

Photo: Thinkstock.comThe STORY: I think, said Janet to herself, that I just figured out a solution to my problem of letting the prospect run the meeting.With that thought in mind, she got out of her c...


Your business is not a bank

Photo: Thinkstock.comYour plumbing business is not a bank. But when you are giving terms to customers that exceed what you get from your suppliers, you become one. And every time that someone does not...

_








Member of BC Press Council


27373