Strong Canadian merger and acquisition activity continues.
Pioneer Natural Resources Co., Dallas, has made a $1.66 billion (Canadian) offer for Chauvco Resources Ltd., Calgary. Pioneer, formed by the recent merger of Mesa Inc. and Parker & Parsley Co. (OGJ, Aug. 18, 1997, p. 29), said the deal will make it the second biggest publicly traded U.S. independent.
In addition, Ranger Oil Ltd., Calgary, has made a $566 million stock and cash offer for heavy oil producer Elan Energy Inc., also of Calgary.
Pioneer-Chauvco
Chauvco shareholders would receive 0.45 share of Pioneer for each Chauvco share, and Pioneer would assume $303 million in Chauvco debt.
The offer values Chauvco at $26.75/share but spins off Chauvco properties in Gabon into a separate company, Chauvco Resources International Ltd.
Chauvco plans to distribute to its shareholders the right to acquire the company's 20% interest in the proposed Alliance gas pipeline from British Columbia to Chicago. Alliance expressed concerns on how the Chauv- co sale may affect its participation in the pipeline project. Major Chauvco shareholders Gendix Inc., Winnipeg; Trimac Inc., Calgary; and Chauvco CEO Guy Turcotte have committed 48% of outstanding shares to the deal.
At yearend 1996, Chauvco had total oil and gas reserves of 740 million boe and recent production of about 32,506 boed, including 20,160 b/d of crude oil and NGL and 123.4 MMcfd of natural gas. About 40% of the assets are in Canada and 60% in Argentina. They include 1,740 gross producing wells and exploration potential on 1.5 million net acres. Pioneer sees significant growth potential in Canada and hopes to increase its Canadian production by 25% in 2-3 years.
Ranger-Elan
Ranger's takeover offer includes $154 million in Elan debt. Elan holds properties with estimated heavy oil reserves of 5 billion bbl and has had financial problems because of price differentials with light crude.
Ranger, a major independent operator in Canada and the North Sea, said it has financial and economic resources to take a disciplined and economic approach to heavy oil development. Ranger projects 1998 production for the merged company oft 80,000 b/d of liquids and 200 MMcfd of gas.
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