Summary
Chesapeake Energy Corporation (Chesapeake) has announced an agreement to acquire Canaan Energy Corporation (Canaan) for $18.00 per share in cash. This acquisition is valued at approximately $118 million, including assumed debt and prior stock purchases. The transaction is expected to significantly enhance Chesapeake's proved reserves by 100 Bcf and increase its daily production by 22,000 Mcf, aligning with Chesapeake's strategy of acquiring and developing natural gas assets in the Mid-Continent region. The deal is subject to regulatory approvals and a shareholder vote by Canaan. Chesapeake anticipates the acquisition to be accretive to its financial metrics in the latter half of 2002 and beyond. Canaan's management has recommended that its shareholders vote in favor of the merger.
Key Highlights
- 1Chesapeake Energy Corporation to acquire Canaan Energy Corporation for $18.00 per share in cash.
- 2Total transaction value estimated at $118 million, including $33 million in assumed debt.
- 3Acquisition adds approximately 100 Bcf of proved natural gas reserves and 22,000 Mcfe/day of production.
- 4Reserves are primarily located in Chesapeake's core Mid-Continent operating area.
- 5Transaction expected to be accretive to Chesapeake's asset value, cash flow, and EBITDA.
- 6Canaan's Board of Directors unanimously approved the merger and recommends shareholders vote in favor.
- 7Expected closing in the third quarter of 2002, subject to customary closing conditions and shareholder approval.