Canadian Natural Resources to acquire Painted Pony Energy

Canadian Natural Resources has signed a definitive arrangement agreement to acquire all issued and outstanding common shares from smaller rival Painted Pony Energy.

Canadian Natural will pay a cash consideration of $0.69 per share, valuing the deal at around C$461 million ($344.26m), reported Reuters.

They will also assume Painted Pony’s total debt of nearly C$350m.

Headquartered in Calgary, Painted Pony is as a natural gas producer with operations in the Montney formation in Northeast British Columbia.

With this acquisition, Canadian Natural adds around 270 million cubic feet per day of natural gas and 4,600 barrels per day of NGLs to its production before royalties.

Canadian Natural’s President Tim McKay said: “This acquisition further strengthens Canadian Natural’s natural gas assets and production base in key operating areas and complements the company’s diversified portfolio.

“This transaction also allows us to further insulate against natural gas costs in our oils sands operations and has minimal impact on the company’s low overall corporate decline rate. We look forward to working together with the staff currently employed by Painted Pony.”

The transaction comes at a time when the Covid-19 pandemic has dampened the demand for natural gas.

In a statement, Painted Pony said that the deal provides the best alternative to its shareholders under challenging circumstances.

The deal is expected to close in the late third quarter of early fourth quarter of this year, subject to customary closing conditions.

Last year, Canadian Natural Resources acquired the assets of Devon Canada in an all-cash deal of C$3.8bn ($2.8bn).