PetroBakken Energy To Buy Berens Energy For $323M

Berens Energy Ltd. is headed off the block.
The Calgary, Alberta, oil and gas production company said Monday, Jan. 4, it will be acquired by newly formed Calgary peer PetroBakken Energy Ltd. for C$336 million ($323 million), or C$2.70 per Berens share.
The deal includes C$65 million of debt and gives a 33% premium to Berens' closing price on Dec. 31.
The move closes a two-month auction. Berens Energy hit the block Nov. 23 when it tapped Peters & Co. Ltd. for a strategic review after weakening financial results.
"Peters & Co. organized a competitive process for us. We had lots of interest and bids," Berens CEO Dan Botterill said. He declined to elaborate.
The deal should close by Feb. 25 and requires approval by two-thirds of Berens shareholders. A bid circular will be mailed by Jan. 25, with a special stockholder meeting set for Feb. 24.
Management has already tendered 24% of the outstanding shares.
The deal includes a $10 million breakup fee.
Botterill said Berens has promising reserve prospects in its Cardium oilfield and felt a sale would create the most value for shareholders.
"The Cardium is a new oil resource play, we have a bunch of land in the area," he said.
The Cardium play is in central Alberta, just west of Edmonton, and has estimated reserves of 3,650 barrels of oil equivalent per day.
According to Berens' most recent filing, dated Nov. 12, it reported a net loss of C$3.6 million on C$8.3 million of revenue for the third quarter, compared with C$8.2 million in net income on C$17.3 million in sales for the 2008 third quarter.
The company blamed lower gas prices for the decrease. Natural gas prices averaged C$3.21 per million cubic feet during the quarter, down 63% from C$8.77 a year ago, according to Berens.
Berens had a debt and working capital deficiency of C$63.2 million at the end of the third quarter, along with C$9 million set aside for capital spending for the rest of the year.
The company drew on C$62 million of its C$66 million bank line as of the filing date.
PetroBakken said it was funding the acquisition through a C$1.25 billion expanded credit line underwritten by Toronto-Dominion Bank and noncore asset sales in Alberta for $180 million.
Jon Truswell, R. Vance Milligan and Karen Keck of Calgary's Bennett Jones LLP were legal counsel for Berens.
TD Securities Inc. advised PetroBakken on the deal.
PetroBakken was formed on Aug. 4 when it was spun out of Petrobank Energy and Resources Ltd. The company then bought TriStar Oil & Gas Ltd. for C$2.24 billion.
PetroBakken focuses its operations in southeastern Saskatchewan in the Bakken oil and gas play, which also extends into North Dakota and Montana. PetroBakken said it closed out 2009 with 37,000 barrels of oil equivalent produced from the Bakken play.
Berens joined a trio of Calgary oil and gas producers on the block when it initiated its strategic review in November. Canext Energy Ltd. hired National Bank Financial Inc. Oct. 27 to review options, while Serrano Energy Ltd. hired Cormark Securities Inc. Nov. 6 for a similar process. Landis Energy Corp. hired Pollitt & Co. Oct. 16 for a strategic review.
Those three companies all remain on the block.
PetroBakken could not be immediately reached.