Subscribe
Be the first with the news that moves the market- International Petroleum Corp (TSX:IPCO) has acquired Alberta-based Granite Oil Corp (TSX:GXO) for C$37.1 million
- IPC will also assume $40 million in debt from Granite Oil
- As a result, International Petroleum has added 14 million barrels of oil equivalent to its reserve estimate
- IPC has allotted another $10 million in 2020 to develop Granite’s incoming assets
- International Petroleum Corp (IPCO) is down 2.63 per cent, with shares trading for $4.08
International Petroleum Corp (TSX:IPCO) has acquired Alberta-based Granite Oil Corp (TSX:GXO) for C$37.1 million.
Through the acquisition, International Petroleum Corp has added 14 million barrels of oil equivalent to its reserve estimate.
IPC’s buyout places a significant premium on Granite Oil stock, which was valued at 59 cents before the acquisition was announced. As part of the deal, IPC has also assumed $40 million in debt from Granite Oil.
As a result, Granite Oil will delist from the TSX and the OTCQX around March 10, 2020. All Granite Oil shareholders are entitled to 95 cents per share.
CEO of IPC, Mike Nicholson, is excited about the company’s new addition.
“The acquisition of Granite provides access to a new resource play fairway that adds additional reserves, resources and production of long life, high margin light oil with significant growth potential.
We believe that we can more than double current production levels within the next three years, more than fully funding this growth with the cash flows generated from these assets,” he said.
In its 2020 outlook, IPC allotted another $10 million to grow Granite’s incoming assets.
While Granite Oil’s stock has since jumped up to the premium rate, IPC’s share price has continued to sink.
Despite the deal, the value of oil continues to drop due to COVID-19’s global economic impact, taking IPC’s share price with it.
IPC began operations in 2017. Since then, the company has made mergers and acquisitions a cornerstone of its growth model. IPC is currently developing oil projects in France, Canada, and Malaysia.
International Petroleum Corp (IPCO) is down 2.63 per cent, with shares trading for $4.08 at 2.14pm EST.
