Vermilion Energy has agreed to acquire Westbrick Energy, a privately held oil and gas company operating in the Deep Basin, in a deal worth C$1.075bn ($750m).
According to the terms of the agreement, Vermilion Energy will acquire all of the issued and outstanding shares of Westbrick Energy, including any convertible securities exercised before or in line with the closing of the deal.
Shareholders of Westbrick Energy, including holders of convertible securities will have the option to elect to receive up to 1.7 million Vermilion Energy common shares, capped at a total value of C$25m ($17.4m).
Through the acquisition, Vermilion Energy aims to strengthen its foothold in Canada’s Deep Basin, adding 1.1 million acres of land and four operated gas plants with a combined processing capacity of 102 mmcf/d.
The expansion complements Vermilion Energy’s existing liquids-rich Montney asset and aligns with its long-term goal of enhancing shareholder value through operational efficiency, debt reduction, and portfolio optimisation.
Besides, the deal is expected to enable Vermilion Energy to yield significant synergies, including improved capital efficiency, optimised infrastructure, and expanded gas marketing opportunities from its enhanced Deep Basin portfolio.
The transaction excludes undeveloped Duvernay rights on approximately 300,000 acres of land, which will be retained by the shareholders of Westbrick Energy.
The acquired assets come with a substantial inventory of over 700 drilling locations in formations such as Ellerslie, Notikewin, Rock Creek, Falher, Cardium, Niton and Wilrich.
A stable production of 50,000 boe/d comprising 75% gas and 25% liquids is expected for Vermilion Energy in 2025. This represents 5% year-over-year growth in production.
Vermilion Energy president and CEO Dion Hatcher said: “The Deep Basin is an area Vermilion has been operating in for nearly three decades and is currently the largest producing asset in the Company.
“The acquisition adds 50,000 boe/d of stable production and approximately 1.1 million (770,000 net) acres of land from which Vermilion has identified over 700 drilling locations, providing a robust inventory to keep production flat for over 15 years while generating significant free cash flow to enhance the company’s long-term return of capital framework.”
The transaction has secured the support of over 90% of Westbrick Energy’s shareholders.
Subject to customary conditions, including receipt of applicable shareholder, court and other regulatory approvals, the deal is expected to be completed in Q1 2025.
