We advised Vermilion Energy Inc. on its acquisition of Elkhorn Resources Inc. for total consideration of approximately $427 million, comprised of $180 million of cash, the issuance of 2.8 million common shares of Vermilion valued at approximately $205 million (based on the closing price per Vermilion common share of $72.50 on the Toronto Stock Exchange on April 29, 2014), and the assumption of an estimated $42 million of debt.
Pursuant to the acquisition, Vermilion acquired high netback, light oil producing assets in the Northgate region of southeast Saskatchewan and other assets including approximately 57,000 net acres of land (approximately 80% undeveloped), seven oil batteries, and preferential access to 50% or greater capacity at a solution gas facility that is currently under construction. The majority of production and development drilling opportunities are from the Midale formation, with additional opportunities identified in the Frobisher, Bakken and Three Forks/Torquay formations. The acquisition creates a new core area for Vermilion in the Williston Basin where it has been evaluating producing entry opportunities for an extended period of time.
The Norton Rose Fulbright team included Robert Engbloom, KayLynn Litton, Bernette Ho, Dion Legge, Rashi Sengar, Jung Lee, Daniel Bellefontaine, Julianna Fish, Adam Lamoureux, Damilola Olawuyi, Kate Stevens, Tina Sun, Mara Rogers, Donald Ainscow and Steven Suzzan in New York, and Ron Scharnberg in Houston.