Canadian Manufacturing

Baytex Energy boosts bid for Australia-based oil and gas firm

Calgary-based firm's offer for Aurora Oil & Gas now stands at roughly $2.67 billion



CALGARY—Baytex Energy Corp. is increasing its offer to acquire Australia’s Aurora Oil & Gas Ltd. to roughly $2.67 billion, including $744 million in debt.

That’s up from its earlier offer valued at $2.6 billion.

Baytex raised its offer to roughly $4.29 per Aurora share, up from roughly $4.18.

The sweetened offer has the support of two of Aurora’s large shareholders, Harbour Advisors and Stirling Global Value Fund Inc., which together hold roughly 17.4 per cent of Aurora’s shares.

Aurora shareholders will vote on the offer on May 21 in Perth, Australia.

The acquisition will allow Calgary-based Baytex to expand into the lucrative Eagle Ford shale gas deposit in Texas.

Once the deal closes, Baytex’s core operating areas will include Eagle Ford, Peace River oilsands in northwestern Alberta and Lloydminster heavy oil near the Alberta-Saskatchewan border.

At that point, its total production is expected to be 85,000 barrels of oil per day.

With the Aurora assets, Baytex will be 53 per cent heavy oil, 34 per cent light oil and 13 per cent natural gas.

The current breakdown is 75 per cent heavy oil, 14 per cent light oil and 11 per cent natural gas.

Most of the Eagle Ford acreage included in the deal is operated by a subsidiary of Marathon Oil Corp.

Aurora, whose head office is in Australia, trades on the Australian and Toronto stock exchanges.

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