Signs of Uneasy Acquisitions as Orlen Upstream Canada Buys Kicking Horse Energy Inc

Published Date : Oct 14, 2015

The Polish energy company PKN Orlen has agreed to acquire Kicking Horse Energy Inc. for a premium, signaling the position that energy companies are in while oil and gas sector’s major players are buying smaller distressed energy companies at discounted prices.

On Tuesday, Orlen made the announcement that it had finalized a deal to buy the energy company from Calgary for US$356 mn plus debt. The deal is subject to shareholder approval.

Although the deal also includes debt, only a small portion of the final price – US$63 mn – is termed as debt in the list, unlike a few other deals that occurred in Canada’s oil fields.

Kicking Horse CEO and President Steve Harding said that the offer was fruitful for where his company stood at the moment. He also said that the response he received from all shareholders was largely approving and positive.

Brian Kristjansen from Dundee Capital Markets said that the buy does not seem like a distressed acquisition. He also recommended Kicking Horse shareholders to accept the Orlen offer.

Kicking Horse currently produces nearly 4,000 barrels of oil equivalents daily through shale rock formations in northwest Alberta. The company could also possibly have been approached by other potential buyers.

The energy company has also attracted interest from rival players, such as Paramount Resources, Ltd. The latter is drilling on the land adjacent to the Kicking Horse base of operations. The founder and executive chairman of Paramount Resources, Clayton Riddell owns nearly 426,000 shares in Kicking Horse which is about 0.7% of the energy company.