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Veren Inc. VRN and Whitecap Resources Inc. have announced a transformative C$15 billion merger, creating Canada’s leading light oil and condensate producer with significant assets in Alberta’s Montney and Duvernay formations. The combined entity will hold the largest land position in Alberta Montney and Duvernay and rank as the seventh-largest producer in the Western Canadian Sedimentary Basin.
The deal will require the necessary approval of the shareholders of both companies and will also need court and regulatory approvals before closing.The transaction, expected to close by May 30, 2025, promises enhanced shareholder value, operational synergies and a strengthened balance sheet.
Details of the Agreement
The agreement states that the C$15 billion transaction is inclusive of net debt and for each Veren common share held, the Veren shareholders will receive 1.05 common shares of Whitecap. At the close of the transaction, Whitecap shareholders will own about 48% and Veren shareholders will own about 52% of the combined common shares outstanding.
The company will continue under the Whitecap name, with the Whitecap management leading the combined company and four Veren directors joining the Whitecap board. The board of the combined company will consist of eleven members: seven directors from Whitecap and four from Veren. The combined management team will lead to the formation of an experienced board of directors that will prioritize sustainable and profitable growth to generate strong returns for the shareholders.
Scale and Efficiency Benefits of the Deal
The merger brings together complementary asset bases, increasing production capacity to 370,000 barrels of oil equivalent per day (boe/d), with 63% liquids. The company will also hold over 4,800 Montney and Duvernay development locations, securing decades of future production. In Saskatchewan, the combined entity will become the second-largest light oil producer, with 40% of conventional production under waterflood recovery, which has a low decline rate, ensuring long-term stability. The Saskatchewan assets have about 7,000 development locations that will help generate meaningful free funds flow in the future.
Additionally, the deal is expected to deliver immediate financial accretion, boosting funds flow per share by 10% and free funds flow per share by 26%. With anticipated annual synergies exceeding C$200 million, the combined company will have a strong financial outlook, reinforcing its position in public markets.
Financial Benefits and Competitive Edge
The merger will expand the company’s shareholder base and achieve a greater market following. The combined company will continue to pay Whitecap's annual dividend of 73 Canadian cents per share, which represents a 67% increase in the base dividend for Veren shareholders.