CALGARY, Alberta (Reuters) - Pengrowth Energy Trust (PGF_u.TO: Quote, Profile, Research, Stock Buzz) said on Wednesday it will buy Accrete Energy Inc (GZ.TO: Quote, Profile, Research, Stock Buzz) for C$95 million ($94.05 million) worth of its units to add oil and gas production and reserves in a key region, while spinning off Accrete's other properties into a new company.
Pengrowth, a Canadian energy trust, is offering 0.273 units, worth about C$4.97, for each Accrete share and will assume C$25 million in debt. Accrete shareholders will also get one quarter of a share in a new exploration firm that will hold Accrete's properties outside of the key Harmattan region of Alberta.
Pengrowth said buying Accrete's properties will add reserves of 8.4 million barrels of oil equivalent and 1,900 barrels of oil equivalent of daily production.
The spin-off firm will have 3.8 million barrels of reserves and daily output of about 1,100 barrels of oil equivalent per day.
Pengrowth said the Harmattan assets produce light oil and natural gas and boast low operating costs.
The acquisition is expected to close in late August.
Pengrowth units fell 17 Canadian cents to C$18.05 on Wednesday on the Toronto Stock Exchange, while Accrete shares climbed 52 Canadian cents to C$5.85.
(Reporting by Scott Haggett; Editing by Peter Galloway)
the question is, since it has been exhaustively shown in previous discussions, that PWE does not correlate to oil and gas, and that when there is a huge upward trend in oil, PWE barely moves, then why is it that when there is a downward trend in oil, PWE seems to follow it down? What else is at work?
OMG, oil is down, so it will hurt the bottom line (& on the flip side, OMG, oil is up & they hedged the price lower, so it will hurt the bottom line). If I didn't laugh @ this sentiment, I would probably cry. (Glad to be DRIPping). Also, OMG, they're buying another co & diluting the distribution. Has anyone had a chance to look @ the Endev deal? I haven't, but, at .041 units each, I would think our balance sheet for land alone should show this one as a steal.