Cequence Energy Ltd. (CQE.TO: Quote) and Open Range Energy Corp. (ONR.TO: Quote) said Thursday that they have entered into an arrangement agreement whereby Cequence has agreed to acquire all of the issued and outstanding common shares of Open Range.
Under the terms of the arrangement agreement and the plan of arrangement, Open Range will be amalgamated with a wholly-owned subsidiary of Cequence and Open Range shareholders will receive 1.065 Cequence common shares for each Open Range common share held.
Based on the five-day weighted average trading price of the Cequence shares on the Toronto Stock Exchange for the period ending May 30, the exchange ratio implies an aggregate value of about C$103 million for all of the issued and outstanding Open Range shares, and a value of C$1.37 per Open Range share.
The combined company will continue to be led by the current management team of Cequence. Scott Dawson , the President and CEO of Open Range and a member of the current Open Range Board of Directors, will join the Cequence board upon completion of the deal.
The deal, which is highly accretive to Cequence on a cash flow basis, will provide Cequence with a multi-zone liquids-rich natural gas development area at Ansell/Sundance, which Cequence considers to be of high quality.
Cequence also said that it has entered into agreements with a syndicate of underwriters to issue up to $32 million of equity securities.
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by RTT Staff Writer
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