Pengrowth Energy to Acquire NAL Energy for $1.9 Billion to Expand its Medium and Light Oil Business in the Western Canadian Sedimentary Basin - Deal Analysis from GlobalData

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Pengrowth Energy to Acquire NAL Energy for $1.9 Billion to Expand its Medium and Light Oil Business in the Western Canadian Sedimentary Basin - Deal Analysis from GlobalData Powered By Docstoc
					          Pengrowth Energy to Acquire NAL Energy for $1.9 Billion to
           Expand its Medium and Light Oil Business in the Western
         Canadian Sedimentary Basin - Deal Analysis from GlobalData
        Reference Code: GDGE0372M&A                                                                                                                          Publication Date: May 2012


        1         Table of Contents
        1 Table of Contents.................................................................1                 1.2      List of Figures
         1.1 List of Tables .................................................................1
         1.2 List of Figures ................................................................1                Figure 1: Location of Assets of Pengrowth and NAL Energy in
        2 Pengrowth Energy to Acquire NAL Energy for $1.9 Billion ..2                                                   the Map, 2012 .......................................................... 2
         2.1 Deal Overview ...............................................................2                   Figure 2: Pengrowth, 1P and 2P Reserves after Acquisition of
         2.2 Deal in Brief ...................................................................2                         NAL Energy, MMboe, 2012 ...................................... 3
         2.3 Pengrowth Plans to Acquire NAL Energy to Expand its                                              Figure 3: Pengrowth, Breakdown of Total 1P Reserve by
              Medium and Light Oil Business in the Western                                                              Commodity, %, 2012 ................................................ 3
              Canadian Sedimentary Basin ........................................2                            Figure 4: Western Canadian Sedimentary Basin, 2012........... 5
         2.4 Western Canada Sedimentary Basin is Among the Most                                               Figure 5: NAL Energy, Contribution of Various Segments to
              Prolific Oil and Gas Regions in Canada ........................4                                          the Total Production, Percentage, 2012 ................... 5
         2.5 Fall in Natural Gas Prices were Affecting the Revenue
              of NAL Energy ...............................................................5
         2.6 Deal Financials and Valuations .....................................6
        3 Appendix ..............................................................................8
         3.1 Methodology ..................................................................8
         3.2 Contact Us.....................................................................9
         3.3 Disclaimer......................................................................9


        1.1       List of Tables
        Table 1:       Canada, Major Deals of Pengrowth, 2010 – till
                       present .....................................................................3
        Table 2:       Canada, Major Deals in Western Canada
                       Sedimentary Basin, January 2012 – till date ............4
        Table 3:       Companies Involved .................................................6
        Table 4:       Financials of the Deal ...............................................6
        Table 5:       Advisor Information...................................................6
        Table 6:       Target Information ....................................................6
        Table 7:       Target’s Financial Information ..................................6
        Table 8:       Share Price Information ............................................7
        Table 9:       Company Valuation Multiples ...................................7
        Table 10:      Target’s Production and Reserves Information ........7
        Table 11:      Company Valuation Multiples ...................................7
        Table 12:      Commodity Prices in $, Last Close ...........................7
        Table 13:      Acquirer Information .................................................7




                                                                                                                                                    GDGE0372M&A / Published MAY 2012
Pengrowth Energy to Acquire NAL Energy for $1.9 Billion to Expand its
                                                                                                                                                                                      Page 1
Medium and Light Oil Business in the Western Canadian Sedimentary
                                                                                                        © GlobalData. This report is a licensed product and is not to be copied, reproduced,
Basin
                                                                                                                                                                shared or resold in any form
        2       Pengrowth Energy to Acquire NAL                                 2.3     Pengrowth Plans to Acquire NAL Energy to
                Energy for $1.9 Billion                                                 Expand its Medium and Light Oil Business
                                                                                        in the Western Canadian Sedimentary
        2.1     Deal Overview                                                           Basin
        Deal Type:                    Acquisition (100%)
                                                                                Pengrowth’s plan to acquire NAL Energy is aimed at expanding
        Deal Status:                  Announced                                 its light oil business in the Western Canadian Sedimentary
                                                                                Basin (WCSB). The presence of both the companies in the
        Announced Date:               March 23, 2012
                                                                                same regions of WCSB makes it a rationale to come together to
                                                                                expand the business. After the acquisition, the combined
        2.2     Deal in Brief                                                   business entity will have access to more than 730 locations
        Pengrowth Energy Corporation (Pengrowth), agreed to acquire             across Swan Hills, the central Alberta Cardium and southeast
        the entire share capital of NAL Energy Corporation (formerly            Saskatchewan. Pengrowth presently has its presence in the
        known as NAL Oil & Gas Trust) (NAL Energy), for a purchase              prolific WCSB, primarily in the Swan Hills (Alberta), Lindbergh
        consideration of CAD1,900m ($1,908.34m) or CAD8.56 ($8.6)               (Alberta) 
				
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Description: Pengrowth Energy Corporation (Pengrowth), agreed to acquire the entire share capital of NAL Energy Corporation (formerly known as NAL Oil & Gas Trust) (NAL Energy), for a purchase consideration of CAD1,900m ($1,908.34m) or CAD8.56 ($8.6) per share, including approximately CAD600m ($602.63m) debt. Under the terms of the agreement, NAL Energy shareholders will receive 0.86 of a Pengrowth share for each NAL Energy share (exchange ratio). The exchange ratio represents a premium of 9.7% for NAL Energy shareholders based on the closing price on March 22, 2012 (a day before the day of deal announcement). Based on the 20-day volume-weighted average prices on the Toronto Stock Exchange (TSX) of Pengrowth and NAL, the exchange ratio represents a premium of 11% for NAL shareholders. Pengrowth will also assume all of the rights and obligations of NAL Energy relating to 6.75%, 6.25% and 6.25% convertible unsecured subordinated debentures of NAL Energy maturing on August 31, 2012, December 31, 2014, and March 31, 2017, respectively. The Bank of Nova Scotia is acting as financial advisor to Pengrowth Energy and BMO Capital Markets Corp. is acting as financial advisor to NAL Energy in the transaction. The transaction is expected to be completed on May 31, 2012, subject to approval of the NAL Energy shareholders of at least 66.06% of the NAL shares and also the approval of a majority of the votes by the Pengrowth shareholders.
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