Whitecap Resources buys light oil asset in Saskatchewan for $110 million

CALGARY – Whitecap Resources Inc. (TSX:WCP) has struck a $110-million deal to buy a package of principally Crown lands in the Dodsland area of Saskatchewan.

The purchase of the Viking light oil assets will add about 900 oil equivalent barrels of daily output, and will increase to 1,200 in 2014 after $8.2 million in planned capital expenditures.

Whitecap Resources said the acquisition includes facilities and pipeline infrastructure near its existing Viking-area operations.

As a result of the deal, the company said it will now produce an average of 17,800 to 18,000 oil equivalent barrels of daily output for the year, up from its previous guidance of 17,200 to 17,400.

To pay for the purchase, Whitecap will raise $110 million through a common share offering and a non-brokered private placement of flow-through common shares.

The company said it will sell nearly 9.3 million shares at $9.70 per share to a syndicate of underwriters and nearly 1.9 million flow-through shares at $10.67 per share in the non-brokered private placement.

Whitecap shares, which were halted ahead of the announcement, closed up 13 cents at $10.11 on the Toronto Stock Exchange.