Saturn Oil & Gas Buys Ridgeback Resources For $525 Million

Calgary-based Saturn Oil & Gas (SOIL) is buying privately held Ridgeback Resources for
$525 million.

The deal includes a cash payment of $475 million and $50 million of Saturn common stock that will be paid to Ridgeback shareholders.

The company said the cash portion of the deal will be funded through a $375 million increase in a Saturn Oil & Gas’ senior secured term loan and a $125 million bought deal offering.

Saturn said in a statement that the acquisition of Ridgeback, which is a light oil producer, will help it scale operations in Alberta and Saskatchewan, and grow future profits.

The Ridgeback purchase covers 430,000 acres of land in four operating regions of Saskatchewan and Alberta.

Saturn Oil & Gas said it expects that its annual oil production will more than double to 27,170 barrels of oil equivalent per day from 12,500 currently once the purchase of Ridgeback Resources is finalized.

The deal is expected to close by the end of this year’s first quarter.

Saturn Oil & Gas’ stock has declined 25% in the last year to currently trade at $2.55 per share