Calgary-based explorers Whitecap Resources Inc. and Torc Oil & Gas Ltd. have agreed to join forces in a merger that combines their light oil-weighted portfolios.

The all-stock transaction is valued at around C$900 million ($703 million), including C$335 million of Torc’s net debt.

The combination, which is keeping the Whitecap brand, would become one of the largest pure-play conventional light oil producers in Canada with more than 100,000 boe/d, 78% weighted to oil and natural gas liquids (NGL). Torc’s current production averages 25,000 boe/d.

“We are combining two strong Canadian energy producers to form a leading large-cap, light oil company geared toward generating sustainable long-term returns for shareholders while prioritizing responsible Canadian energy...