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(Bloomberg) -- Tourmaline Oil Corp. agreed to acquire rival Black Swan Energy Ltd. for about C$1.1 billion ($910 million) as Canada’s largest natural-gas explorer eyes future exports of the heating and power plant fuel from the country’s west coast.
The purchase of closely held Black Swan will give Tourmaline gas production of as much as 2.3 billion cubic feet per day by mid-2022, Tourmaline said Friday in a statement. Both companies operate in western Canada’s Montney shale formation, which Tourmaline said will be important in supplying future exports of liquefied natural gas.
Investors have been pushing for more mergers in the North American shale industry to realize cost savings and create companies that achieve a greater scale and return more cash to shareholders. Tourmaline’s deal is the latest example of shale companies being rewarded by investors for executing deals with competitors operating in the same region in order to get more bang for their acquisition buck.
Shares of Tourmaline, which have more than quadrupled in value since the early days of the global pandemic last year, rose as much as 7.3% to the highest in more than four years.
The deal, Tourmaline’s biggest in almost half a decade, is expected to close in the second half of this year.
(Updates with shares in fourth paragraph.)
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