TORONTO — A major oilpatch move may be in the works as Suncor Energy Inc. is close to acquiring Petro-Canada a source told the Wall Street Journal.
Although no details could be confirmed on the valuation of such a deal Sunday evening, a statement was expected before markets were to open Monday morning.
Sunday the Wall Street Journal reported that the acquisition would be valued at $15 billion US in stock, citing people familiar with the matter.
Spokespeople for the companies declined to comment to the paper, which said an announcement was expected to come as early as Monday.
The paper said the price tag “would represent a roughly 30 per cent premium for Petro-Canada” and the deal would allow the companies to merge while conserving cash.
This development would form one of the largest companies in Canada and the nation’s biggest energy company with a market value of $35 billion.
But any agreement to acquire Petro-Canada would require the approval of the federal government because of legislation preventing anyone from holding more than 20 per cent of the former Crown corporation.
A merger of the two companies would combine Petro-Canada’s extensive retail gasoline and refining business and its international operations with Suncor’s extensive operations in the oilsands.
In January Calgary-based Petro-Canada reported it suffered a loss in the fourth quarter as the price of crude plummeted and deferral charges related to the Fort Hills oilsands project weighed.
Petro-Canada, the fourth-largest energy producer in the country, reported a loss of $691 million, or $1.43 a share, compared with net earnings of $522 million, or $1.08 a share, in the year-earlier period.
Last year, Petro-Canada booked a profit of more than $3.1 billion, or $6.47 a share, or 15 per cent more than fiscal 2007.
With oil prices depressed as the global economy continues to weaken, Petro-Canada then said it has lowered its production forecast for this year to between 345,000 and 385,000 barrels per day.
Suncor Energy Inc. announced its first quarterly net loss in 16 years in January and a $3-billion capital budget cut to go along with the mothballing of its $20.6-billion Voyageur oilsands expansion.
Reuters and Financial Post
© Copyright (c) Canwest News Service
http://www.theprovince.com/Business/...tml?id=1416927 
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