Canadian Natural Resources Ltd announced 10 August 2020 it will buy Painted Pony Energy Ltd for about $469 million including debt, as Canada’s biggest oil and gas producer seeks to expand its Western Canada acreage.
Canadian Natural will also take on about $358 million of Painted Pony’s debt. The companies expect to close the deal in the second half of the year.
Based on estimates by Stifel FirstEnergy; using 4.1x net operating income (NOI) in 2021 (at strip) or 5.9x NOI based on their 2020 outlook; a “land only” based metric for Painted Pony's 185,704 net acres comes in at $2,525/acre.
Painted Pony will hold a special meeting of securityholders in September 2020, where it requires 66.67% of votes in favor of the transaction to close. To that end, the company’s executive suite, board of directors, and 2 largest shareholders, which represent an aggregate 25% of shares outstanding, have entered into agreements to vote in favor of the transaction.
The arrangement includes a $20 million non-completion fee.
