Amber, AEC Agree On Merger Terms
Amber Energy's board has accepted a revised merger offer from
Alberta Energy Co. (AEC) and said it will cease pursuing the sale
of some of its midstream assets.
AEC last week raised its offer for Amber by 50 cents a share to
$7.50, or 0.225 AEC shares for each Amber common share, and agreed
to an aggregate limit of 4.5 million shares, which is up from 3
Together, the two gas companies hold the largest gas reserve
base of any publicly-owned oil and gas company in Canada with 4 Tcf
of reserves, and create one of the largest gas producers north of
the border with about 900 MMcf/d of gas production, said AEC
President and CEO Gwyn Morgan.
The deal increases AEC's gas production 30% and doubles its
liquids reserves, according to Morgan.
"We are acquiring the premier heavy oil assets in Canada, with
the lowest cost structure. Our 1999 forecast pro forma oil and NGLs
production will now increase 42%, compared to 1998 levels, to
85,000 barrels per day. As well, Amber brings another 850,000 net
acres of exploration land and tax pools of about $560 million,
which will offset current income taxes from the Amber assets for
several years," said Morgan.
"This transaction complements our own internal growth
opportunities and is part of our strategic growth plan as a leading
Canadian oil and gas company. The Amber assets are concentrated,
high working interest holdings that overlap principally with AEC's
own natural gas operations near Primrose and its oil assets at
Pelican Lake in northeastern Alberta," Morgan added.
Amber said its board received oral opinions from FirstEnergy
Capital Corp. and Goldman, Sachs & Co., that the revised offer
is fair from a financial point of view to Amber shareholders.
The offer will be open for acceptance by Amber shareholders
until Friday, Oct. 23. The offer is conditional on 66 2/3% of
Amber's outstanding shares being tendered.
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