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Whitecap Resources Inc. and Veren Inc. have announced plans to merge in a $15-billion transaction aimed at creating Canada’s largest light-oil-focused producer.
If approved, the new company, under Whitecap’s name, would have combined production of around 370,000 barrels of oil equivalent per day, the companies said in a release Monday.
The merger stands to create the largest Canadian light oil producer and the seventh-largest producer overall in the Western Canadian Sedimentary Basin.
Whitecap chief executive Grant Fagerheim acknowledged the advantage in becoming a bigger player when deploying capital and dealing with suppliers.
“When you’re putting this much capital to work on an annual basis, right around $2.5 billion of capital being put into the market, that does give you better negotiating power and it also helps from an operating cost perspective,” he said on BNN Bloomberg on Monday, adding he expects more than $200 million in annual savings from combining operations.
“We’re going to have to pay some one-time fees and closing, but as we move forward into the back half of the year and into 2026, this can be a very, very well-oiled machine to advance forward on.”
The new company would also be the largest landholder in the Alberta Montney and the second largest across unconventional Montney and Duvernay fairways, with a combined 1.5 million acres in Alberta, the release said. The combined company would also be the second-largest producer in Saskatchewan.
The new company will be led by Whitecap’s current management team, with four Veren directors — including chief executive Craig Bryska — joining Whitecap’s board.
The all-share transaction is valued at $15 billion, including net debt. Under the terms of the deal, Veren (formerly known as Crescent Point Energy Corp.) shareholders will receive 1.05 Whitecap shares for each Veren share. Post-merger, Whitecap shareholders would own roughly 48 per cent of the combined company; Veren shareholders will own 52 per cent.
The deal will be voted on by both companies’ shareholders in early May. The merger will also require court and regulatory approvals.
Veren’s stock had been trading lower in recent months after the company was forced to cut its 2024 production forecast on the heels of some disappointing results from the testing of a new type of well design.
Eric Nuttall, a partner and senior portfolio manager at Ninepoint Partners LP — which has significant holdings of Veren — described Whitecap’s move as “very opportunistic” since Veren was still working to regain investor confidence after its stumble last year.