CALGARY, ALBERTA – Ovintiv Inc. is strengthening its position in Western Canada through an agreement to acquire Logan Energy Corp. in a transaction valued at $1.26 billion, including the assumption of debt.
Headquartered in Denver, Ovintiv expects the acquisition to increase its production by approximately 20,000 barrels of oil equivalent per day in the Montney formation, which extends across parts of northern British Columbia and Alberta.
The deal also provides access to two additional oil batteries and interests in two natural gas processing facilities, expanding the company’s existing production infrastructure.
Ovintiv President and Chief Executive Officer Brendan McCracken said the transaction would create value for shareholders by adding high-margin oil and condensate production. He also highlighted the potential to generate significant synergies by leveraging the company’s operational capabilities, while expanding its drilling inventory and future growth opportunities.
“The Logan assets have demonstrated leading oil productivity performance and will immediately compete for capital alongside the rest of our portfolio,” McCracken said in a news release.
The acquisition marks another step in Ovintiv’s expansion in Canada. Formerly known as Encana, the company relocated its headquarters from Calgary to the United States in 2020. Earlier this year, it further strengthened its Canadian operations by completing the $3.8-billion acquisition of NuVista Energy Ltd., another producer focused on the Montney region.
Under the terms of the agreement, Ovintiv will pay Logan Energy shareholders $1.40 per share in cash.
In addition to the cash consideration, shareholders will receive 0.0817 of a share in a newly created company, Logan Oil, for each Logan Energy share held. They will also receive 0.05 of a Logan Oil purchase warrant per Logan Energy share.
Each whole warrant will entitle its holder to purchase one Logan Oil share at an exercise price of $1 per share. The warrants must be exercised within 60 days following the closing date.
Completion of the transaction is expected early next year, subject to shareholder approval, court approval and the necessary regulatory authorizations.
