Veren (VRN) said Monday it has entered into a definitive business combination agreement with Whitecap Resources to create a light oil and condensate producer with concentrated assets in the Alberta Montney and Duvernay.
The all-share transaction is valued at approximately $10.4 billion, inclusive of net debt.
Under the terms of the agreement, Veren shareholders will receive 1.05 common shares of Whitecap for each Veren share held, resulting in approximately 48% ownership for Whitecap and 52% for Veren.
The combined company is expected to have a production forecast of 370,000 barrels of oil equivalent per day, of which 63% liquids and a forecast annualized funds flow of C$3.8 billion ($2.62 billion). After annual capital investments of C$2.6 billion, free funds flow is forecast at C$1.2 billion.
The transaction is expected to close by May 30, subject to regulatory approvals and shareholder votes, including at least two-thirds of Veren common shareholders and a majority of Whitecap common shareholders.
Veren said it will continue its normal dividend schedule for Q1 but will cease regular dividends afterwards. If the transaction closes after May 31, 2025, Veren shareholders will receive a Special Dividend of C$0.03833 per share monthly.
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