CALGARY (CP) -- Vero Energy Inc. [TSX:VRO] said Thursday it plans to acquire private oil-and-gas firm Ledge Resources Ltd. for C$69 million.
That price includes assuming C$18 million of Ledge's debt.
Vero plans to issue about 4.75 million common shares to help pay for the acquisition, along with C$18.75 million in cash to Ledge shareholders, Vero said in a release.
Ledge properties in central Alberta are expected to produce an average of 1,050 barrels of oil equivalent per day in the first quarter of the 2006 financial year, comprising 55% natural gas and 45% liquids with the liquids consisting mainly of light sweet oil.
Upon completion of the deal, Vero said its production would be about 2,300 barrels of oil equivalent per day in 2006; 70% natural gas. Its 2006 capital budget would increase to C$40 million to allow C$6 million for new drilling in Ledge lands.
The takeover deal is subject to conditions, including the tendering of at least 90 per cent of Ledge shares. Vero said it has lock-up agreements with shareholders who together have more than 90 per cent of Ledge's shares.
Vero's offer has the unanimous support of the board of directors of both companies, Vero said in a release. The offer will be mailed to Ledge shareholders in mid-February.
Vero Energy Inc. is a Calgary-based oil and natural gas exploration and development company.
Prior to Vero's release, its shares fell 10 cents to close at C$6.35 on the Toronto Stock Exchange.
(c) The Canadian Press 2006
