Ranger Oil Ltd.’s board of directors has announced that afteralmost three months of unacceptable bids, it is ready to make arecommendation to its shareholders to sell all of its outstandingshares to another Calgary-based producer. Canadian NaturalResources Ltd. made an offer that Ranger’s board of directors couldnot refuse.

The deal, which tops a hostile bid made by Petrobank Ltd., willoffer per Ranger share either C$8.25 in cash up to a maximum ofC$650 million, or 0.175 of a Canadian Natural share up to a totalof 10 million shares. The C$8.25 a share offer represents a 9%premium over the average closing price for the last 20 days. Asterms of the deal, CNRL will absorb Ranger’s debt of C$525 millionwhich puts the total value of the deal in the area of C$1.6billion.

This agreement comes just days after Petrobank revised its hostiletakeover bid and gave Ranger a deadline to agree to the offer. (seeDaily GPI, June 14) “This offer is inthe best interests of our shareholders. It is the result of a thoroughand extensive process, designed to maximize value for Rangershareholders, which resulted in a number of competing offers. The CNRLbid recognizes the strong underlying value of Ranger’s assets andoperations. This combination will create a stronger platform to expandRanger’s international activities and pursue new opportunities,” saidFred Dyment, Ranger’s president.

A pre-acquisition agreement has been signed, and CNRL — ratedas a company on the move by a veteran Canadian market watcher —is in the process of mailing the formal offers to Ranger’sshareholders. In response to the deal, Ranger is no longer allowingprospective buyers into the data room and has issued CNRL the rightto match a competitor’s bid. If the sale does not go through forcertain reasons, Ranger will pay a break fee of C$45.9 million.CNRL’s acquisition offer will be open for acceptance until the endof July.

The Ranger acquisition would allow for a low-risk entry into theinternational arena. CNRL is the third largest oil and gas producerin Canada. Including the assets in this transaction, the companywill be producing about 860 MMcf/d of natural gas and 200,000 bbl/dof oil.

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