Pengrowth Energy Corporation (NYSE:PGH) recently made the announcement of their plan to buy up competitive company NAL Energy Corporation (TSE:NAE) for about $1.3 billion Canadian dollars. That number will also include debts. It’s a move that will help boost Pengrowth’s presence in areas that are light in oil such as southeast Saskatchewan as well as Swan Hills and central Alberta. It will also increase the shares for NAL Energy by at least twenty-six percent of Pengrowth.
Derek Evans,the CEO of the buyer company, release this statement, “The combination of Pengrowth and NAL represents the continued execution of our value-creation strategy. The addition of the NAL assets will enhance our cash flow base and further augment our robust light oil drilling inventory.”
NAL’s CEO/president Andrew Wiswell explained that he wanted his company to be part of a deal that “commitment to its dividend-paying business model.” The deal won’t officially be approved until May. It needs an agreement from at least two-thirds of both companies shareholders before the plan can proceed any further.
Pengrowth Energy Corporation is an energy company that is headquarted in Calgary, Alberta. They have assets in natural gas and oil, most of which is located in the Western Canada area and Nova Scotia coastline. They currently produce petroleum products using oils, natural gas, and gas-based liquids.
NAL Energy Corporation works extensively in the Western Canada area and they currently trade their stocks exclusively on the Toronto Stock Exchange.
The acquition plan sounds like it could be a very good thing for both corporations as it will enable them to reach a wider market and trade more stock shares on a collective basis. Pengrowth’s plans to acquire NAL Energy will put both companies in the public eye and hopefully increase their chance of appearing as a viable player in the energy market.