Calgary, Alberta-based energy producers Baytex Energy Corp. and Raging River Exploration Inc. agreed to merge into a single C$5 billion oil-focused company operating under Baytex's name.

The combined company would have average annual production of 100,000 to 105,000 barrels of oil equivalent per day, with 85% oil and NGLs, as well as an exploration and development capital program of C$750 million to C$850 million aimed at production growth of 5% to 10%, according to a June 18 news release.

The company would have a position exceeding 260,000 acres in the "emerging" East Duvernay Shale position in central Alberta, which "has the potential to compete for capital with the best plays in North America," Baytex President and CEO Edward LaFehr said.

Under the merger deal, Raging River's shareholders would receive 1.36 Baytex common shares for each Raging River share. The net equity value of the deal amounts to $2.8 billion, with $2.1 billion in net debt, according to the release.

Raging River's executive chairman and CEO, Neil Roszell, would become the chairman of the combined company, while LaFehr would be president and CEO. Raymond Chan would be appointed lead independent director of the company's board.

The deal is scheduled to close in August, subject to shareholder and regulatory approvals.

CIBC and Scotiabank acted as co-financial advisers to Baytex, while Stikeman Elliott LLP is serving as legal adviser. GMP FirstEnergy is acting as financial adviser to Raging River, and Burnet Duckworth & Palmer LLP is serving as the legal adviser.