Abu Dhabi National Energy Co., the state-controlled power generator and oil producer, agreed to buy Canada's PrimeWest Energy Trust for about C$4 billion ($4 billion) in the biggest-ever North American takeover by a United Arab Emirates company.
Persian Gulf states, flush with cash from burgeoning oil revenues, are buying overseas assets at a record pace. Calgary- based PrimeWest would be Abu Dhabi National's sixth overseas acquisition since November. The deal would give Abu Dhabi National, also known as Taqa, daily production of oil and gas equivalent to more than 61,000 barrels of oil in Canada and the U.S., the companies said in a statement today.
``This looks like another acquisition designed to underpin the lower risk, upstream segment of their business that Taqa's using to generate cash for expansion,'' Zahed Chowdhury, head of Middle East research for Deutsche Bank AG, said in an interview from Dubai. ``What Taqa can bring to the table is capital to put into exploration and maintenance of PrimeWest's assets.''
Taqa will pay about C$26.75 each for PrimeWest's outstanding units and exchangeable shares and will assume about C$1 billion in the income trust's debt, raising the total value of the deal to C$5 billion, PrimeWest spokesman George Kesteven said in a voicemail message. The cash portion represents a 34 percent premium to PrimeWest's closing price on Sept. 21.
Units of PrimeWest rose C$6.42, or 32 percent, to C$26.36 at 1:19 p.m. on the Toronto Stock Exchange. Taqa's shares rose 0.7 percent to 2.78 dirhams in Abu Dhabi.
Reserves, Output
Taqa Chief Executive Officer Peter Barker-Homek on Aug. 16 said the company may spend $3 billion over the next 12 months to more than double production and reserves from the Canadian oil and gas business it bought from Pogo Producing Co. The acquisition of PrimeWest would give Taqa proved and probable reserves equivalent to 285 million barrels of oil.
Taqa on Aug. 23 agreed to buy Pioneer Natural Resources Co.'s assets in Canada for $540 million and earlier in the month completed its $2 billion acquisition of Pogo's Canadian unit, Northrock Resources Ltd. The Pogo unit has proved reserves equivalent to 142 million barrels of oil.
``Taqa is very much fulfilling the Abu Dhabi government's policy of diversifying its assets in other regions of the world,'' said Philipp Lotter, senior analyst at Moody's Investors Service in Dubai with an Aa2 investment-grade rating on the company's debt. ``This deal fits the profile of their recent acquisitions in Canada.''
PrimeWest in July 2006 bought properties in Montana, North Dakota and Wyoming with daily output equivalent to 3,200 barrels of oil.
Persian Gulf states, flush with cash from burgeoning oil revenues, are buying overseas assets at a record pace. Calgary- based PrimeWest would be Abu Dhabi National's sixth overseas acquisition since November. The deal would give Abu Dhabi National, also known as Taqa, daily production of oil and gas equivalent to more than 61,000 barrels of oil in Canada and the U.S., the companies said in a statement today.
``This looks like another acquisition designed to underpin the lower risk, upstream segment of their business that Taqa's using to generate cash for expansion,'' Zahed Chowdhury, head of Middle East research for Deutsche Bank AG, said in an interview from Dubai. ``What Taqa can bring to the table is capital to put into exploration and maintenance of PrimeWest's assets.''
Taqa will pay about C$26.75 each for PrimeWest's outstanding units and exchangeable shares and will assume about C$1 billion in the income trust's debt, raising the total value of the deal to C$5 billion, PrimeWest spokesman George Kesteven said in a voicemail message. The cash portion represents a 34 percent premium to PrimeWest's closing price on Sept. 21.
Units of PrimeWest rose C$6.42, or 32 percent, to C$26.36 at 1:19 p.m. on the Toronto Stock Exchange. Taqa's shares rose 0.7 percent to 2.78 dirhams in Abu Dhabi.
Reserves, Output
Taqa Chief Executive Officer Peter Barker-Homek on Aug. 16 said the company may spend $3 billion over the next 12 months to more than double production and reserves from the Canadian oil and gas business it bought from Pogo Producing Co. The acquisition of PrimeWest would give Taqa proved and probable reserves equivalent to 285 million barrels of oil.
Taqa on Aug. 23 agreed to buy Pioneer Natural Resources Co.'s assets in Canada for $540 million and earlier in the month completed its $2 billion acquisition of Pogo's Canadian unit, Northrock Resources Ltd. The Pogo unit has proved reserves equivalent to 142 million barrels of oil.
``Taqa is very much fulfilling the Abu Dhabi government's policy of diversifying its assets in other regions of the world,'' said Philipp Lotter, senior analyst at Moody's Investors Service in Dubai with an Aa2 investment-grade rating on the company's debt. ``This deal fits the profile of their recent acquisitions in Canada.''
PrimeWest in July 2006 bought properties in Montana, North Dakota and Wyoming with daily output equivalent to 3,200 barrels of oil.
Via|Bloomberg|by Sonja Franklin and Will McSheehy
AbuDhabi|
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