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ENI will buy First Calgary Petroleums to add reserves
Italy's largest oil company will get access to major resources in Algeria with $872m pact as global hunt continues
- Bloomberg
- Published: 23:49 September 8, 2008
Milan: ENI SpA, Italy's largest oil company, agreed to buy First Calgary Petroleums Ltd of Canada, accessing resources in Algeria and helping boost reserves.
The acquisition values Calgary-based First Calgary at C$923 million ($872 million, Dh3.2 billion), ENI said in a statement yesterday. The Italian company agreed to pay C$3.6 for each First Calgary common share and will offer convertible debt holders $108,000 for each $100,000 in securities they own.
Rome-based Eni will gain access to First Calgary's 75 per cent stake in the perimeter area of the Ledjmet block in Algeria. About half the estimated 1.3 billion barrels of oil and other hydrocarbons located in the area is gas, Eni said.
Eni will increase reserves by about 190 million barrels of oil and gas equivalent, it said. Production at the Algerian field is set to start in 2011 with Eni's share of output reaching 30,000 barrels a day the year later, the company said.
Good move
"So far, Eni has moved well in the European natural gas market, which is in continuous development," said Gianmaria Bergantino at Bank Insinger de Beaufort NV in Rome. "If they can win additional market share it will surely help."
Eni is adding output at deposits from Alaska to Siberia as energy companies step up their search for reserves.
The company spent about $14 billion last year buying gas deposits in Russia and Turkmenistan.
To help boost its share of the European gas market, Eni agreed in May to pay 2.74 billion euros for control of Belgian distributor Distrigaz SA. Eni is the largest seller of the fuel on the continent.
Eni is offering about 21 per cent more than First Calgary's average share price in the year through the close of trading on September 2. The Canadian company's stock jumped 41 per cent on September 3 after saying it had received buyout offers.
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