February 28, 2012 / 1:53 PM / 6 years ago

UPDATE 2-Whitecap Resources to buy Midway Energy for C$450 mln

* Whitecap sees 2012 avg production to rise 43 pct

* Whitecap offers C$4.85 in cash or 0.4802 of its share

* Midway shares rise to C$4.83

By Maneesha Tiwari

Feb 28 (Reuters) - Canada’s Whitecap Resources Inc said it will buy light-oil explorer Midway Energy for about C$450 million in a cash-and-stock deal that will add complementary assets to its drilling operations in the Pembina Cardium field in Alberta.

Calgary-based Midway, which has light oil assets in Garrington and Swan Hill, Alberta, reported proven plus probable reserves of 24.2 million barrels of oil equivalent (boe) as of Dec. 31.

“It’s a very solid move by Whitecap,” said Analyst Kevin Shaw at Casimir Capital.

The transaction will add Midway’s top-tier Beaverhill Lake and Garrington assets to the Whitecap portfolio, he said. “It rounds up the company’s core portfolio with additional Cardium assets,” Shaw added.

With this deal, Whitecap -- which has operations in Alberta and Saskatchewan -- raised its average production forecast 43.5 percent to about 15,500 barrels of oil equivalent per day (boe/d) for this year.

This is Whitecap’s third acquisition in the last one year. The company has a long-term debt of C$104.81 million and cash and equivalents of C$12,000, according to Thomson Reuters data.

THE DEAL

Whitecap said it will pay C$4.85 in cash or 0.4802 of its share for each Midway share.

It will also assume Midway’s debt of about C$100.8 million.

The cash payment is limited to about $111.2 million, while the maximum number of Whitecap shares to be issued will be about 33.5 million, the company said in a statement.

The company said it will partly fund the deal with a C$120 million bought deal.

Shares of Midway rose 12.3 percent to C$4.83 on the Toronto Stock Exchange, but fell short of Whitecap’s offer price.

Shares of Whitecap were trading down 4 percent at C$10.07. They earlier touched a low of C$9.91 in early trade on Tuesday on the Toronto Stock Exchange.

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