- Calima Energy (CE1) has agreed to acquire 100 per cent of Canadian oil and gas company Blackspur Oil
- The company will pay Blackspur C$17 million (A$17.19 million) in a combination of cash and shares
- Calima Energy will conduct a capital raise of at least $34 million, to fund the deal
- The companies will combine management teams, with Blackspur founder Jordan Kevol becoming CEO and President following the merger
- Calima Energy shares have been suspended since February 16 and last traded at 1 cent per share
Calima Energy (CE1) has agreed to wholly acquire Canadian oil and gas company Blackspur Oil.
Blackspur is a privately held company, which owns producing oil and natural gas assets in Alberta. The proposed merger of the two companies would transform Calima Energy into a high-margin oil and gas producer.
The company intends to pay Blackspur C$17 million, or approximately A$17.19 million, in a combination of cash and shares. This consideration will consist of C$12.1 million (roughly A$12.24 million) in Calima shares and up to C$4.9 million (A$4.95 million) in cash.
The acquisition agreement also includes a contingent consideration component of up to C$4.5 million (A$4.55 million) in Calima shares. This is based on Blackspur’s net debt position upon closing.
To fund its acquisition of Blackspur, Calima will conduct a capital raise of at least $34 million, and at most A$38 million. Some of these funds will be used to reduce Blackspur’s credit facilities with the National Bank of Canada, providing an undrawn bank capacity to achieve strategic goals with.
As part of the merger, the companies will combine their management teams in Canada. Blackspur’s founder, Jordan Kevol, will become the CEO and President of the merged entity, which will continue under the name Calima Energy.
The acquisition transaction is expected to close sometime in late April 2021.
Calima’s Chairman, Glenn Whiddon, said that the company looks forward to combining with the Blackspur team and continuing its growth.
“The merger with Blackspur creates an emerging oil and gas producer with production and current operating cashflow of around C$1.8 million a month in addition to a substantial reserve and resource base for future growth,” he said.
“The Montney acreage offers material upside exposure to rising gas prices from the growth of the LNG industry in Canada and North American demand,” he added.
Calima Energy shares have been suspended since February 16 and last traded at 1 cent per share.