Italy's Eni buys First Calgary for $923M
Eni SpA has bought First Calgary Petroleums Ltd. for $923 million in an all-cash deal, the Italian oil giant said on Monday.
Eni, a large integrated oil and gas company, will pay $3.60 per share for the Calgary company, a price which represents a 53 per cent premium compared to First Calgary's closing price of $2.36 on Sept. 2.
First Calgary's board of directors has voted in favour of the buyout and a group of investors holding 18 per cent of the firm has also agreed to the deal.
Eni said it wants First Calgary because the Canadian firm's 75 per cent interest in a huge Algerian natural gas field fits with the European producer's existing operations in North Africa.
Eni takes over First Calgary(CBC)"We are committed to the successful and rapid development of these gas fields and the consequent rapid start up of an important resource for the country," said Eni president and chief executive officer Paolo Scaroni in a statement.
Eni, which has been pumping oil and gas in Algeria since 1981, owns a large natural gas pipeline that carries production gas from fields in Algeria and Tunisia to Italy.
First Calgary's Algerian holdings has an estimated 1.3 billion barrels of oil equivalent, 50 per cent in oil and 50 per cent in natural gas. (Natural gas is measured in cubic feet, not barrels.)
Eni said the buyout will boost its overall production by a total of 190 million barrels of energy equivalent. First Calgary's Algerian field will produce 30,000 barrels of energy a day starting in 2012.
For the Canadian company's shareholders, the deal represented a victory of sorts.
Three-month stock chart for First Calgary PetroleumsFirst Calgary's stock languished between $1.68 and $2.36 for much of the summer.
The company, which does not yet produce significant amounts of oil or natural gas, faced a revolt in the spring from shareholders upset about the company's business plans.
That fight ended up with First Calgary getting a new slate of directors and a new CEO.
Shares in First Calgary jumped at the beginning of September, forcing the company to admit that it was speaking with unnamed buyers.
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