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By Shaun Penner

All-stock merger

Seven Generations, ARC Resources to merge in deal worth $8.1B

Feb 10, 2021 | 7:22 PM

ARC Resources LTD. and Seven Generations Energy LTD. announced Wednesday that they have agreed to an all-stock merger deal worth $8.1 billion, that would create one of Canada’s largest producers of natural gas.

The deal will see the merged company become the biggest producer in the Montney play, with the ability to produce 340,000 barrels of oil equivalent per day in 2021.

The company will operate under the name of ARC Resources Ltd. and remain headquartered in Calgary. Currently, Seven Generations is headquartered in Grande Prairie, which will become a field operation headquarter for the company, as will Dawson Creek and Drayton Valley.

Seven Generations shareholders will receive 1.108 common shares of ARC for each common share of Seven Generations held, as part of the deal.

Upon closing of the deal, ARC shareholders will own approximately 49 per cent, while Seven Generations shareholders will own approximately 51 per cent of the total shares outstanding.

In a release, the two say the merged company will “continue to focus on significant free funds flow generation”.

“The combination is consistent with ARC’s and Seven Generations’ long-term strategies and is expected to be immediately accretive on a free funds flow and net asset value per share basis to all shareholders.”

The merged company will become Canada’s largest condensate producer, third-largest natural gas producer, and sixth-largest upstream energy company.

ARC’s Hal Kvisle will serve as Board Chair of the merged company, and Seven Generations’ Marty Proctor will serve as Board Vice-Chair.

ARC’s Terry Anderson will be the company’s President, CEO and Director, while ARC’s Kris Bibby will be Senior Vice President and Chief Financial Officer. Seven Generations’ David Holt will serve as Senior Vice President and Chief Operating Officer.