Mergers and acquisitions: Energy outfits ink billion-dollar deal

A $5.5 billion agreement has just been signed between Encana Corp. and Newfield Exploration. In the mergers and acquisitions deal in Canada, Encana will not only be getting all of Newfield's shares of common outstanding stock, but will also take on more than $2 billion of Newfield's net debt. This marks Encana's most ambitious acquisition to date.

Together, Encana and Newfield churn out 577,000 barrels of oil-equivalent per day. Three-hundred thousand barrels of that are liquids. The deal will be closing in the first quarter of next year at which time the company is planning to hike dividends by 25 per cent with an expansion of share buyback to $1.5 billion.

This deal gives Encana a footprint in the West Texas/southeast New Mexico Permian Basin along with a presence in the Montney in Canada's west and in Oklahoma's STACK/SCOOP. The CEO of the merged company said the combination advances the company's overall strategy and bodes well for its five-year plan. This merger will likely see liquids production (oil) to account for more than 50 per cent of total production and will elevate the company to second place in terms of being North America's producer of unconventional resources.

A lawyer in Canada who is experienced in mergers and acquisitions transactions can negotiate documents and help to close deals. Mergers or acquisitions usually better a company's standing in the business world. During the negotiating process, issues may arise that seem insurmountable. A corporate lawyer may be able to help resolve these points in order to enable clients to get the deals completed successfully.

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