Artek: Kelt Exploration to acquire Artek in $307mln deal

Kelt Exploration (TSE:KEL), an oil and gas company focused on Alberta and British Columbia, has agreed to acquire Artek Exploration (TSE:RTK) in an all-share deal, on the basis of 0.34 of a Kelt share for each Artek share.Based on the average trading price of Kelt shares for the five trading days that ended February 20 of $8.10 on the Toronto Stock Exchange, the deemed acquisition price is $307 million. The implied per share price is $2.76, a 61 percent premium to the average trading price of Artek for the five trading days ending February 20.Consideration also includes the assumption of an estimated $89.5 million of net debt as of February 20, which includes estimated associated transaction costs of $5.6 million.The deal is expected to provide Artek shareholders with enhanced liquidity and ownership in a larger growth oriented oil and gas exploration and production company, with a strong record of growth and value creation, the company said.Kelt said the Artek acquisition will be accretive to existing Kelt shareholders on a reserves, production, funds from operations and net asset value per share basis.The deal is expected to close in the second quarter.Artek's reserves at December 31, 2014 consisted of 24.0 million barrels of oil equivalent of proved reserves and 46.4 million barrels of oil equivalent of proved plus probable reserves.Kelt said the acquisition cost, including future development capital costs and estimated associated transaction costs, is $20.46 per boe (barrel of oil equivalent) for proved reserves and $12.89 per boe for proved plus probable reserves.Artek's January 2015 production is estimated to be approximately 5,400 boe per day. Its land holdings at December 31, 2014 were 262,254 net acres, of which 202,967 net acres were undeveloped.