Tourmaline said after yesterday's close that it would sell a royalty on its oil and gas lands in Alberta and British Columbia, along with interests in two of its 19 natural gas processing plants and other third-party revenues, to newly created Topaz Energy for $775M in cash and stock.
Topaz aims to raise $150M-$200M in a private placement of shares with investors to fund the deal, with the result that Tourmaline will wind up with 75%-81% of the shares and $135M-$185M in cash.
Analysts praise the deal and predict further upside if Topaz is used as a platform to accumulate more royalty and infrastructure interests.
The assets being assigned to Topaz could easily make it worth more than $1B when it goes public, which is expected to occur in 2020, GMP FirstEnergy analyst Robert Fitzmartyn says.
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