Seeking Alpha

Baytex Energy acquires Aurora Oil & Gas for $2.6B, to raise dividend 9%

  • Baytex Energy Trust (BTE) agrees to acquire Australia-based Aurora Oil & Gas for ~$1.8B in cash plus assumption of ~$744M in debt.
  • Aurora's primary asset is 22,200 net contiguous acres in the Sugarkane field in south Texas in the core of the Eagle Ford shale; Aurora's Q4 2013 gross production was 24,678 boe/day (82% liquids) of predominantly light, high-quality crude oil.
  • BTE says the deal is highly accretive on a per share basis to reserves, production, and funds from operations.
  • BTE plans to increase its monthly dividend by 9% to $0.24/share, subject to the completion of the acquisition.
  • Shares halted.
Comments (3)
  • Simchad
    , contributor
    Comments (91) | Send Message
    Sounds great but I don't like the price of the financing.
    6 Feb, 04:45 PM Reply Like
  • yunfah
    , contributor
    Comments (12) | Send Message
    Sounds expensive, eh? But if the acquisition will be highly accretive it means Baytex will be able to handle the load easily. Let's wait for more details of their due diligence.
    7 Feb, 12:06 AM Reply Like
  • RM13
    , contributor
    Comments (814) | Send Message
    I like the deal. It's relatively expensive, but BTE just diversified itself away from Canadian oil spreads. Good move IMO for a play that will pay about 7% yield at current prices - sustainable as well.
    7 Feb, 11:08 AM Reply Like
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