"This acquisition further strengthens Canadian Natural's natural gas assets and production base in key operating areas and complements the company's diversified portfolio," Canadian Natural president
"This transaction also allows us to further insulate against natural gas costs in our oilsands operations and has minimal impact on the company’s low overall corporate decline rate."
The acquisition of
Canadian Natural is best known as one of
In a statement, Painted Pony said it is facing liquidity challenges caused by three years of weak natural gas prices and more recent declines in prices for the petroleum liquids produced with the gas.
It decided on a confidential process to enhance shareholder value, it said, and its board determined the corporate buyout offer of
Painted Pony's shares have traded between
Separately, Canadian Natural said Painted Pony's lands in northeastern B.C. are located near its similar operations and offer potential synergies in infrastructure and pipelines.
It said the assets produce about 270 million cubic feet per day of natural gas and 4,600 barrels per day of petroleum liquids.
By comparison, Canadian Natural produced 1.46 billion cubic feet per day of gas and 922,000 barrels per day of crude oil and liquids in the second quarter.
Analysts said the transaction was good for both companies but better for Canadian Natural, whose shares were little changed on Monday.
"Although we would consider the acquisition as immaterial to base operations today (four per cent of total production), the purchase is consistent with Canadian Natural's history of opportunistic acquisitions along cyclical lows, adding significant future gas inventory,"
Analyst
"The acquisition certainly marks a disappointing conclusion for PONY shareholders after languishing for years under the crippling weight of elevated debt levels and depressed natural gas prices," he said.
Painted Pony will hold a special meeting in September to vote on the deal which will require support of two-thirds of the shares.
It said holders of about 25 per cent of its shares, including its two largest shareholders, have agreed to support the transaction.
This report by the
Companies in this story: (TSX:PONY, TSX:CNQ)
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