Less than two months after being put up for sale, Berens Energy drew a $336-million takeover offer from PetroBakken Energy, the latest sign that it's a sellers market in the oil patch.
Berens is a junior oil and gas play with properties in central Alberta. The company's board of directors boasts decades of industry experience - they have seen valuations rise and fall over the years, and they know the risks that come with turning a promising property into a producing oil field.
The board decided in mid-November that they would review strategic options, with an eye towards selling a collection of proven reserves that faced a technically challenging and expensive development process. Peters & Co. was hired to vet potential suitors.
Just six weeks later, PetroBakken stepped up with an offer. At $2.70 a share, in cash, this is a 33 per cent premium to where Berens was trading on Dec. 31, and a 103 per cent premium to where this stock was trading when the strategic review was announced.
TD Securities advised PetroBakken on this transaction, and the company will fund the acquisition in part by tapping credit lines: PetroBakken has a $1.25-billion credit facility.
The sale of Berens, along with far larger, natural gas-focused acquisitions by global players such as Exxon Mobil and Total, shows senior energy companies are buyers at this point in the commodity cycle. For junior companies, that hunger for reserves translates into premium valuations when properties change hands.