Canadian Natural Resources Shares Up on Devon Energy Assets Acquisition
By Esther Tanquintic-Misa | February 20, 2014 12:30 PM EST
Shares of Canadian Natural Resources Ltd jumped on Wednesday after the Oklahoma City-based oil and natural gas company Devon Energy Corp announced on the same day that the Canadian firm would acquire some of its assets.
Gas flares from an oil-production platform in Persian Gulf at the Soroush oil fields with an Iranian flag in the foreground, about 776 miles south of the country's capital of Tehran
Canadian Natural's stocks closed C$40.63, up 3.7 per cent on the Toronto Stock Exchange after it announced its deal to purchase Devon Energy's conventional assets in Canada for C$3.13 billion ($2.86 billion).
Canadian Natural is Canada's no. 1 independent oil producer. The cash it will pay Devon Energy will be used by the latter to help repay debt from a $6 billion acquisition in the Eagle Ford region of Texas.
Acquiring 2.2 million undeveloped acres near Canadian Natural's fields in western Canada, the purchase will help boost the Canadian firm's overall production to 86,633 barrels a day. Most of the assets it acquired from Devon Energy were about 70 per cent gas.
The acquisition, according to according to Phil Skolnick, an analyst at Canaccord Genuity Corp, will help balance the company's production output of heavy oil to 41 per cent from 45 per cent.
This is because 30 per cent of the acquired assets churn out valuable natural gas liquids and light oil, Lanny Pendill, an Edward Jones analyst, told Canadian Press. These can be developed sooner, he added.
"It's very opportunistic," Mr Pendill said. "I think, essentially, what we've seen is a company with a strong financial position taking an opportunity of a weaker company that's trying to sell off some assets to regain its focus. In doing so, they've bought some assets that fit very nicely at a very reasonable price, with some longer-term value," he added.
Steve Laut, Canadian Natural president, agreed the acquisition fits the company's strategy "of opportunistically adding to our existing core areas where we can provide immediate value with the opportunity to add value in the future."
The acquisition will add C$75 million into Canadian Natural's cash flow in 2014.
The sale expected to close on April 1. It includes gross proved reserve of 272.2 million barrels of oil equivalent as well as six gas plants.
To report problems or to leave feedback about this article, e-mail:
To contact the editor, e-mail:
Most Popular Slideshows
- NFL MNF: Washington Redskins 20, Dallas Cowboys 17 (OT) [PHOTOS]
- Emma Watson Gets 'Squished' In 'Colonia Dignidad' [PHOTOS]
- 2014 MLB World Series Game 6: Kansas City Royals 10, San Francisco Giants 0 [PHOTOS]
- San Francisco Giants Beat Kansas City Royals, 3-2 In Game 7, Wins 2014 MLB World Series [PHOTOS]
Join the Conversation
- Russia Warns Citizens – Take Selfies, Have Lice
- The Cost Of Getting Infected With Ebola
- Ebola Divides The US: More States Begin Applying Stricter Guidelines Than What CDC Imposed
- Canadian House Owners Preferring To Live In Core City Than In Suburbs: Study
- FIFA May Keep Russia and Ukraine Apart in World Cup 2018
- Marvel Announces Release Dates Of 11 Upcoming Movies From 2015 To 2019
- Xiaomi Becomes World’s Third Largest Smartphone Manufacturer By Dethroning Huawei
- Entry Of Peshmerga Fighters From Iraq Boosts The Kobani Battle Against ISIS: Turkey Provides Transit
- Nokia Lumia 730 v. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- Nexus 6, 9 Buyers on November Release Will Enjoy These 3 Killer Lollipop 5.0 Features First
- Australia Special Forces Await 'Delayed' Iraqi Visas Before Joining ISIS Fight
- Woman Hanged In Iran Talks Abuse In Prison, Left Chilling Message To Family