$1.9 Billion Oil Deal in Calgary
CBJ — Calgary-based Paramount Resources is entering into a $1.9-billion deal to sell most of its oil and natural gas producing assets in western Alberta to Calgary rival Seven Generations Energy.
As part of the transaction, Paramount would receive $475 million in cash and about $827 million in Seven Generations shares.
In turn, Seven Generations would take on about $584 million worth of Paramount’s debt.
The deal would give Seven Generations control of about 80,000 hectares of land producing some 30,000 barrels of oil equivalent per day.
Paramount would become a much smaller company, with about 10,500 barrels of oil in production.
Paramount CEO Jim Ridell said the deal offers a premium return for shareholders while reducing debt, as well as ongoing benefits through Paramount’s resulting ownership of 10 per cent of Seven Generations’ stock.
Pat Carlson, CEO of Seven Generations, said the acquired lands provide operational and investment synergies to drive expansion.
Paramount said it has agreed to pay $80 million to Seven Generations in certain circumstances if the transaction does not proceed.
The deal must be approved by two thirds of shareholders because it involves a substantial percentage of Paramount’s assets.