Torc buys rival for C$147m

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The private light-oil producer Torc Oil and Gas Ltd is to buy listed rival Vero Energy for C$147m (US$150.6m) in a move that will strengthen its presence in the Cardium basin in Canada’s Alberta province.

The combination of the two companies into an entity that will focus on developments in the Cardium is further evidence of the revival in production of light oil from shale and other tight-rock formations in Canada, which had been waning over the past decade as oil-sands developments took an increasingly dominant role in Canadian energy output. However, the shift among shale-gas companies to oil production – driven by weak gas prices – has led the recovery.

The price Torc is paying for Vero represents a 32% premium to the latters’s average share price over the past 10 days. Torc, which was only founded in December 2010, has raised C$100m from a private placement to fund the transaction.

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