CALGARY—Baytex Energy Corp. has acquired Australian oil and gas exploration firm Aurora Oil & Gas Ltd. in a $2.6-billion deal.
Aurora’s primary asset is 22,200 net contiguous acres in the Sugarkane Field in South Texas in the core of the liquids-rich Eagle Ford shale. The field has infrastructure in place, which is expected to facilitate low-risk future annual production growth.
The total consideration to be paid by Baytex is approximately $1.8 billion, plus assumed debt of approximately $744 million for a total transaction value of approximately $2.6 billion.
Commenting on the Acquisition, James Bowzer, President and Chief Executive Officer of Baytex, said, “Baytex will acquire premier acreage in the core of the Eagle Ford, one of the leading shale oil plays in the U.S. The Acquisition is an excellent fit with our existing business model and positions Baytex in another world-class oil resource play. The Acquisition will provide our shareholders with exposure to low-risk, repeatable, high-return projects with leading capital efficiencies.”
“This is a highly accretive transaction on a per share basis to reserves, production, and funds from operations,” said Bowzer. “The Eagle Ford play provides not only exposure to light oil, but also to Gulf Coast crude oil markets with established transportation systems. A portion of the produced crude oil benefits from Louisiana Light Sweet based pricing, which currently trades at a premium to WTI.”
The deal is subject conditions, including approval by the Australian court, the Australian Foreign Investment Review Board and under the U.S. Hart-Scott-Rodino Anti-Trust Improvements Act. It’s expected to close in mid/late May 2014.