Strathcona Resources has increased the value of the company to USD 6.4bn
Major players in the oil and gas market have merged their assets into a single company. Pipestone Energy struck a deal with Strathcona Resources to create a company valued at about USD 6.4 billion. About 67% of Pipestone shareholders supported the acquisition of their company by a larger competitor.
The main argument for Pipestone shareholders was the opportunity for capital appreciation through the portfolio diversification offered by Strathcona’s private company. Under the terms of the deal, Pipestone shareholders will own approximately 9% of the new company. Strathcona’s immediate step is to go public with an initial capitalisation of USD 6.4 billion. This will attract even more investment for further expansion. It is worth noting that the company is already one of the fastest-growing in North America.
Benefits of the Strathcona and Pipestone merger
The advantage of Strathcona as an oil and gas company is that it has a large base of energy reserves that are well-located for production and transportation. As a result, Pipestone shareholders can expect strong returns over the long term.
Strathcona is owned by Waterous Energy, an investment fund based in Calgary, Western Canada. The company has expanded its oil production over the past six years through successful transactions. As a result, production has increased from 5,000 barrels to 185,000 barrels per day. The combined company will maintain a similar level of production. The name of the new company will be Strathcona. It will be under the leadership of Adam Watrous and Rob Morgan, who are now in senior management positions with the company. The merger makes the company Canada’s fifth-largest oil producer.
About Strathcona Resources
In British Columbia and Saskatchewan, the company produces oil and gas. Primary production is in three areas:
– Lloydminster Heavy Oil;
– Montney;
– Cold Lake Thermal Oil.
The fields have large reserves that will last a long time. Strathcona produces WTI oil, which has a good profit-to-cost ratio. This minimises risks.
Strathcona pays particular attention to safety standards. In addition, the company is improving its production and operating processes to minimise negative environmental impacts.
The merger of two companies – Strath and Cona – created the company in 2020. By combining the assets, Strathcona expanded its oil and gas production by adding new fields to its portfolio. The business structure includes the Alberta and Saskatchewan assets acquired from Caltex in 2021.
