Vermilion's Westbrick deal worth $745 million strengthens Canada’s Deep Basin position

Vermilion Energy, a Canadian company, announced on Monday that it would acquire Westbrick Energy, a privately-held oil and gas company. The deal will be for C$1.075 Billion ($746.53 M), mostly in cash. This acquisition will strengthen Vermilion Energy's position in Alberta's Deep Basin.

In premarket trading, U.S. listed shares rose 1.8% to $9.03 per share.

This acquisition will likely add 50,000 barrels per day of equivalent oil, consisting 75% of gas and 25% of liquid, to the existing production.

Vermilion, based in Calgary, Alberta, said that it represented a 5% growth year-over-year and was forecast to generate over C$110,000,000 of free cash flow annually.

Tourmaline Oil (Vermilion's rival and the largest producer in Deep Basin) bought Bonavista Energy last year for C$1,45 billion. This acquisition increased its production by 600,000 boepd.

The oil and natural gas company said that the acquisition is expected to be completed in the first quarter 2025. This will make them the fifth-largest producer in the basin.

It said that certain shareholders of Westbrick who represent more than 90% in the outstanding shares of the company have already signed a resolution authorizing the agreement. $1 = 1.4400 Canadian Dollars (Reporting and editing by Savio d'Souza, Krishna Chandra Eluri).

(source: Reuters)