Saturn Oil & Gas Inc. Announces Acquisition of Ridgeback Resources Inc. Expanding Production to Approximately 30,000 boe/d and Bought Deal Financing including Strategic Lead Orders from GMT Capital Corp. and Libra Advisors, LLC
Indian Oil And Gas News
January 24 -- Transformational $525 million1 ($516 million using the Offering Price for the Consideration Shares) corporate acquisition expands Saturn’s pro forma production by approximately 140%, on closing, to ~30,000 boe/d2 of sustainable, light oil focused, high netback production. The Ridgeback Acquisition, comprised of 17,000 boe/d (~71% light oil and natural gas liquids)3, with a proved developed producing reserve value of $915 million4, forecasted 12-month Net Operating Income3/ Operating Free Funds Flow3 of $311 million / $228 million, 99.4 MMboe of proved plus probable reserves3, and over 700 net drilling locations3, to sustain the acquired production for over 15 years.3 Pro forma the Acquisition, Saturn will be positioned as a bonafide mid-cap oil producer with a market capitalization of approximately $292 million5 and an enterprise value of $850 million, with run rate production of approximately 30,000 boe/d, a combined proved developed producing reserve value of $1.4 billion3, forecasted 2023E EBITDA3 / Free Funds Flow3 of $477 million / $228 million, and 163 MMboe of proved plus probable reserves3. Saturn’s strategy remains to efficiently maintain production and maximize free cash flow to rapidly reduce indebtedness which is expected to be fully repaid within three years, and will be evaluating various opportunities to return significant capital to shareholders. GMT Capital Corp. and Libra Advisors, LLC have indicated that they will make lead orders and strategic investments in the Company. Saturn will seek to appoint up to two new members to the Board of Directors to expand its technical and operational expertise, and separately the Company has entered into new employment agreements with John Jeffrey, President and CEO, and Justin Kaufmann, Chief Development Officer, to align incentives with shareholder interests. CALGARY, AB, Jan. 20, 2023 /CNW/ – Saturn Oil & Gas Inc. (“Saturn” or the “Company“) (TSXV: SOIL) (FSE: SMKA) (OTCQX: OILSF) is pleased to announce that it has entered into an arms-length arrangement agreement (the “Agreement“), to acquire Ridgeback Resources Inc. (“Ridgeback“) a privately held oil and gas producer focused on light oil in Saskatchewan and Alberta, for a transaction value (“TV“) of $525 million1 ($516 million using the Offering Price for the Consideration Shares), by way of statutory plan of arrangement under the British Columbia Corporations Act (“BCBCA“) (the “Ridgeback Acquisition“). The Ridgeback Acquisition is expected to close in Q1 2023 (the “Closing Date“), subject to receipt of all regulatory and shareholder approvals. Through the Ridgeback Acquisition, Saturn will acquire approximately 17,000 boe/d (~71% light oil and natural gas liquids (“NGLs“))6 of low decline, capital efficient production, which, at US$80 WTI oil price, is expected to generate an operating netback3 of $48.55 / boe resulting in annualized net operating income3 (“NOI“) of $311 million, implying a 1.66x TV / NOI multiple. Based on the Ryder Scott Report (as herein defined), the Ridgeback Acquisition has a before-tax Proved Developed Producing3 (“PDP“) NPV10% of $915 million, implying a 0.57x TV / PDP multiple, and a before-tax Total Proved Plus Probable3 (“P+P“) NPV10% of $1.8 billion, implying a 0.28x TV / P+P, with over 430,000 net acres of land, in four core areas, in Saskatchewan and Alberta (the “Ridgeback Assets“).