Canadian Natural Resources Ltd. (CNRL), the nation’s top fossil fuel producer, scooped up 434 square miles of the liquids-rich Montney Shale gas formation in northern British Columbia (BC) with a friendly takeover of Painted Pony Energy Ltd.

Painted Pony management recommended stockholder acceptance of CNRL’s cash offer of C$0.69/share ($0.52), or C$111 million ($83.3 million) for all 160,995,692 Painted Pony shares, CNRL said Monday.

Counting C$350 million ($262.5 million) in Painted Pony debt, the total transaction value is C$461 million ($346 million).

In its recommendation to stockholders, Painted Pony attributed the takeover to “weak prices for natural gas over the past three years and a recent decline in natural gas liquids.” Painted Pony had been searching for...