Pieridae boosts Goldboro LNG resource base with Ikkuma buy

Canadian LNG project developer Pieridae Energy agreed to buy Ikkuma Resources by way of a plan of arrangement. 

The completion of the arrangement will provide Pieridae with ownership of an extensive area of producing and gas-prone reserve and resource properties situated primarily in the central Alberta Foothills area, as well as certain interests in Cardium light oil-focused Alberta Foothills properties to a newly formed private corporation, ExploreCo.

On completion of the arrangement, each shareholder of Ikkuma will receive, for each common share of Ikkuma, 0.1926 of a common share of Pieridae and 0.1 of a share of ExploreCo, with Ikkuma shareholders holding 100 percent of ExploreCo upon completion, Pieridae said in its statement.

However, the completion of the deal is dependent on the approval by the Alberta Energy Regulator (AER).

The exchange ratio values the shares of Ikkuma at $0.86 per share, representing a premium of 188 percent to the closing price of $0.30 per share as of August 23, 2018, of Ikkuma common shares on the TSX Venture Exchange.

Pieridae said the acquisition of Ikkuma is an important step in the execution of its strategic plans for the acquisition of natural gas reserves and resources.

Pursuant to the arrangement Pieridae will acquire the natural gas properties at metrics significantly below the cost of similar reserves and resources in other parts of North America, which is expected to provide one of its long-term competitive advantages for delivering liquefied natural gas to European and other markets.

The cost of acquisition represents less than 0.015 percent of the total cost of Pieridae’s proposed Goldboro LNG project and represents a significant step towards reaching the final investment decision in 2018, Pieridae Energy said.

Ikkuma is expected to provide a basis for further consolidation of long-life natural gas assets in Alberta and British Columbia that are complementary to the feedstock needs of Pieridae.

As part of the acquisition, Pieridae will retain the team of Ikkuma to lead the development of its natural gas properties both in Western and Eastern Canada.

Both Pieridae and Ikkuma believe that the Goldboro LNG facility, combined with the natural gas properties of Ikkuma,  contributes to the evolution and growth of Canada’s only majority Canadian owned integrated LNG enterprise.

The Boards of Directors of each of Ikkuma and Pieridae have unanimously approved the arrangement agreement, and the Ikkuma board of directors, on the recommendation of a committee of independent directors, has unanimously determined that the arrangement is in the best interests of Ikkuma.