In a friendly deal, Canadian natural gas producer Shiningbank Energy Income Fund has agreed to buy Calgary-based Find Energy Ltd. for C$381 million ($338 million). The deal will boost Shiningbank’s weighted-to-gas output by 22%, pumping up production to 27,000 boe/d from its current 4,900 boe/d.

Shiningbank will acquire proved and probable reserves totaling 16 million boe, which puts the purchase price at C$27.97/boe ($24.80), including debt. Shiningbank also will add more than 65,000 net hectares of undeveloped land to its portfolio.

Under terms of the agreement, Shiningbank will pay 0.465 of a trust unit for each Find share. Based on Shiningbank’s share price when the deal was announced Thursday, the transaction values Find at around C$10.23/share ($9.06). Find was selling for around C$9.92/share on Friday. The deal’s value also includes about C$62 million ($55 million) in net debt that Shiningbank will assume.

Shiningbank CEO David Fitzpatrick said the transaction is a “natural fit” for the company, both geographically and strategy-wise. Find’s fields are “primarily concentrated in the Pembina area of west-central Alberta, adjacent to Shiningbank’s O’Chiese property, with an attractive portfolio of drilling opportunities.” He added that Shiningbank had been competing with Find for land and for equipment and drilling rigs. “There’s a beautiful operating synergy between their land-based production and the Shiningbank assets in west-central Alberta.”

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