Calgary-based Blackbird Energy Inc. announced Dec. 19 that its shareholders approved its merger with fellow western Canadian oil and gas producer Pipestone Oil Corp.
The transaction, signed in October, will combine two adjacent Pipestone Montney land bases under new company Pipestone Energy Corp.
Under the deal, Blackbird shareholders and Canadian Non-Operated Resources LP, or CNOR LP, will become the shareholders of Pipestone Oil through Pipestone Energy.
Blackbird's shares will be converted to shares of Pipestone Energy and will be consolidated on a 10:1 basis, with Blackbird shareholders receiving 45.3% of the approximately 189.6 million new shares and CNOR LP shareholders receiving 103.75 million new shares.
Blackbird and Pipestone Oil also signed agreements with shareholders that have committed to common equity financing amounting to about C$111.0 million.
Pipestone Oil arranged approximately C$198.5 million of debt financing. It includes commitments to buy about C$26 million of Blackbird shares from GMT Exploration Co. LLC and certain funds managed by GMT Capital Corp. at a pre-consolidation price of 34 Canadian cents per subscription receipt.
CNOR LP will purchase C$85 million of Pipeline Oil's common shares based on 34 cents per Blackbird share.
The transaction and financing are expected to close on or near Jan. 4, 2019.
Blackbird's shareholders also approved the continuance of Blackbird from British Columbia into Alberta, which was required for the deal to proceed.