Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Baytex Energy to buy Texas-focused Aurora Oil and Gas for $2.6 billion

CALGARY - Baytex Energy Corp. is expanding into the lucrative Eagle Ford shale through its $2.6-billion acquisition of Aurora Oil & Gas Ltd.

The deal, which was announced Thursday, includes $744 million in Aurora's debt and gets Calgary-based Baytex nearly 9,000 net contiguous hectares in the Sugarkane Field in South Texas in the core of the oil-rich Eagle Ford.

Aurora's production during the last three months of 2014 averaged 24,678 barrels of oil equivalent per day, which was mostly light, high-quality crude oil. The formation's proximity to the U.S. Gulf Coast — a massive refining market — means crude from there fetches strong prices.

"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," CEO James Bowzer said in a release.

"The acquisition will provide our shareholders with exposure to low-risk, repeatable, high-return projects with leading capital efficiencies."

Once the deal closes, Baytex's core operating areas will include the 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 in its arsenal, Baytex will be 53 per cent weighted toward heavy oil, 34 per cent toward light oil and 13 per cent weighted to 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.

To help pay for the deal, Baytex has raised $1.3 billion in a bought-deal financing with a syndicate of underwriters co-led by Scotiabank and RBC Capital Markets.

Shares in Baytex, which announced the deal after markets closed, were up one per cent at $41.63 Thursday on the Toronto Stock Exchange.

Follow @LaurenKrugel on Twitter

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
Submit a Random Act of Kindness
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates