The Abu Dhabi National Energy Company (Taqa) has entered into an agreement to acquire all of the issued and outstanding trust units of Canada’s PrimeWest Energy Trust for C$5 billion ($4.99 billion).

Taqa, through its wholly-owned Canadian subsidiaries Taqa North and Alberta Ltd, has offered C$26.75 per unit of PrimeWest, apart from assuming its debt.

PrimeWest is a Calgary-based conventional oil and gas royalty trust that actively acquires, develops, produces and sells natural gas, crude oil and natural gas liquids for the generation of monthly cash distributions to unitholders.

Once completed, the PrimeWest transaction will provide Taqa with an additional 285 million barrels (gross) WI P+P reserves; current production in excess of 61,000 barrels of oil equivalent per day (boe/d); a large, strategic undeveloped land base of over 1.1 million net acres which will be complementary to Taqa North’s existing land base; and a large tax pool position of approximately C$2.7 billion.

“This acquisition is a major leap forward for Taqa globally, and an important step toward the achievement of our strategy to grow to C$20 billion in Canadian assets.  We believe that the PrimeWest assets are an excellent fit with our business objectives and can be significantly enhanced by the combined team’s operational expertise,” said Peter Barker Homek, Taqa’s chief executive officer.

“This acquisition makes Taqa North one of the top 14 producers in Canada, while at the same time providing us with a high quality asset base, more world-class executives and a great workforce that will continue to work on the company’s large portfolio of development opportunities.

“This transaction is further evidence of our long-term commitment to Canada, which is a key focus for our international expansion, and we’re very confident this transaction will represent a net benefit for all parties,” Barker Homek added. 

The transaction is subject to regulatory approval, customary closing conditions as well as a vote by the holders of PrimeWest units, exchangeable shares and unit appreciation rights, voting together as a single class.

The Board of Directors of PrimeWest has unanimously approved the arrangement and based, in part, on the fairness opinion from PrimeWest’s financial advisor discussed below, determined that the Arrangement is in the best interests of PrimeWest and the holders of its units and exchangeable shares. 

The PrimeWest Board has resolved to recommend that such holders vote their respective securities in favour of the arrangement, said the statement. 

Closing of the transaction is expected to occur prior to the end of November 2007.

Taqa North will have P+P reserves in excess of 480 MMBOE and current production of over 105,000 boe/d following the completion of this transaction and the closing of the previously announced acquisition of Pioneer Canada.

CIBC World Markets is acting as sole financial advisor to PrimeWest with respect to the arrangement and has provided the Board of Directors of PrimeWest with an opinion regarding the proposed transaction. –TradeArabia News Service