Strathcona Resources is set to become Canada’s fifth-largest oil producer if its acquisition of Pipestone Energy gets the green light.
In a joint news release on Aug. 1, the Alberta-based companies announced an all-share deal that will create a publicly-traded entity with an expected initial market value of approximately $8.6 billion.
“We are excited about the acquisition of Pipestone, which fits hand-in-glove with our existing condensate-rich Alberta Montney properties and provides a natural hedge to the natural gas and condensate consumed in our Cold Lake Thermal and Lloydminster Heavy Oil operations,” Strathcona President and CEO Rob Morgan said in the release.
“We look forward to welcoming Pipestone’s public shareholders as our new partners and growing per share value for them.”
Once the acquisition is complete, Pipestone is expected to own around nine per cent of the combined company, which will continue to be named Strathcona Resources.
Morgan will remain at the helm as president and CEO.
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Pipestone’s shareholders will vote on the deal during a meeting in September. It needs two-thirds approval to proceed.
If the acquisition gets the thumbs up, it’s expected to close in the fourth quarter of 2023.
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