Whitecap Resources Reports Strategic Agreement to Acquire NAL Resources | Financial Buzz

Whitecap Resources Reports Strategic Agreement to Acquire NAL Resources

Whitecap Resources Inc. has reported entry into an all-stock transaction at approximately USD 155 Million with NAL Resources.  This includes privately held subsidiary Manulife Financial Corporation where Whitecap will issue Manulife 58.3 million Whitecap common shares in exchange for all issues and outstanding NAL shares.  The transaction is expected to close on January 4th, 2021.   

NAL’s production and lands overlap over 80% of Whitecap’s current asset base and provides inventory optimization opportunities in west central Alberta, west central Saskatchewan and southeast Saskatchewan that enhances exposure to economically compelling possibilities. 

The transaction is expected to decrease Whitecap’s leverage ratio by 21% in 2021.  The transaction will enhance the company’s ability to grow production per share within funds flows and allow the company to return capital to shareholders.  Manulife will own 12.5% of the combined entity, a lock-up agreement for 12, 15 and 18 months relatively from the closing date of the transaction as one-third will be released from the lock-up after each period. 

The transaction expected close date is subject to customary condition which include receipt of necessary regulatory approvals that include the approval of the Toronto Stock Exchange.  Whitecap has granted Manulife participation rights in future equity issuances and the parties will enter into an investor rights agreement and a registrations rights agreement at closing which will provide Manulife with specific board observation rights in future equity issuances and future registration rights.