Amber Energy’s board has accepted a revised merger offer fromAlberta Energy Co. (AEC) and said it will cease pursuing the saleof some of its midstream assets. AEC raised its offer for Amber by50 cents a share to $7.50, or 0.225 AEC shares for each Ambercommon share, and agreed to an aggregate limit of 4.5 millionshares, which is up from 3 million. Together, the two gas companieshold the largest gas reserve base of any publicly-owned oil and gascompany in Canada with 4 Tcf of reserves, and create one of thelargest gas producers north of the border with about 900 MMcf/d ofgas production, said AEC President and CEO Gwyn Morgan.
The deal increases AEC’s gas production 30% and doubles itsliquids reserves, according to Morgan. “We are acquiring thepremier heavy oil assets in Canada, with the lowest cost structure.Our 1999 forecast proforma oil and NGLs production will nowincrease 42%, compared to 1998 levels, to 85,000 barrels per day.As well, Amber brings another 850,000 net acres of exploration landand tax pools of about $560 million, which will offset currentincome taxes from the Amber assets for several years,” said Morgan.
“This transaction complements our own internal growthopportunities and is part of our strategic growth plan as a leadingCanadian oil and gas company. The Amber assets are concentrated,high working interest holdings that overlap principally with AEC’sown natural gas operations near Primrose and its oil assets atPelican Lake in northeastern Alberta,” Morgan added.
Amber said its board received oral opinions from FirstEnergyCapital Corp. and Goldman, Sachs & Co., that the revised offeris fair from a financial point of view to Amber shareholders. Theoffer will be open for acceptance by Amber shareholders untilmidnight, local time on Friday, Oct. 23. The offer is conditional,among other things, on at least 66 2/3% of Amber’s outstandingshares being tendered.
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