Strathcona Resources Ltd. is snapping up fellow Calgary producer Pipestone Energy Corp. and its Montney Shale assets in northwestern Alberta in an all-stock deal that would create Canada’s fifth largest exploration and production (E&P) company. 

At the current market price of about C$2.40 (US$1.80), the acquisition of Pipestone’s 279 million shares was estimated to be worth C$429.6 million ($322.2 million).

Strathcona, a private E&P held by Waterous Energy Fund, plans to use the Pipestone takeover to launch as a public company. In Canadian production, only Canadian Natural Resources Ltd., Cenovus Energy Inc., Imperial Oil Ltd. and Suncor Energy Inc. would be larger, according to Strathcona.

From Montney deposits near Grande Prairie, Pipestone has production of about 124...