Canadian natural gas explorer Compton Petroleum Corp. on Monday agreed to a C$33 million friendly takeover bid by New York-based MFC Industrial Ltd., a global commodities trader.
The C$1.25/share offer is a 4%-plus premium to Compton's closing share price Friday on the Toronto Stock Exchange. Compton's management said because gas comprises 84% of its output, the 2012 program had been impacted by the current price outlook. Compton had reduced its 2012 production outlook in April after lenders cut the credit available to the company by more than 20% to C$110 million from C$140 million because of gas prices. Last week Compton sold some of its Alberta assets for C$17 million to repay a portion of its debt.
Gas, natural gas liquids and crude oil exploration in the Deep Basin fairway of the Western Canadian Sedimentary Basin has been Compton's focus. Acreage holdings are in the Rock Creek, Spirit River and Notikewin formations at Niton in Central Alberta, as well as Southern Alberta's emerging oil plays and shallow gas formations at Southern Plains, the Basal Quartz sands at High River, and an emerging play at Callum/Cowley in the Foothills. Compton also has land in the Alberta Bakken Fairway, which runs through Alberta and Montana, including 79,000 net acres on Montana's Blood Indian Reserve.
Compton's board has unanimously approved the offer and subject to shareholder approval, the agreement could be closed in early September. MFC would receive a C$4 million break-up fee if Compton were to back out of the agreement.
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