Shareholders owning more than 95 per cent of the stock in Arc Resources Ltd. ARX-T have approved its merger with fellow Calgary-based producer Seven Generations Energy Ltd. VII-T to create Canada’s sixth largest oil and gas company.
At a brief special virtual meeting on Wednesday, Arc chairman Hal Kvisle, who will have the same role in the merged company, said the motion to issue shares had been overwhelmingly approved.
In an earlier meeting, shareholders of Seven Generations also voted to approve the deal.
“I would like to welcome all of the Seven Generations employees who will be joining the Arc team,” Kvisle said.
“We do look forward to having your expertise and your help (to) drive our business forward.”
The deal was valued at $8.1 billion including debt when announced in February. It required two-thirds approval by Seven Generations shareholders and a simple majority from Arc investors to proceed, and will now be put forward for court and other regulatory approvals.
Detailed voting statistics released Wednesday afternoon showed that 96.08 per cent of the votes cast by Arc shareholders and 99.41 per cent of the Seven Generations votes were in favour of the merger.
The offer of 1.108 Arc shares for each Seven Generations share values Seven Generations at about $2.86 billion at Tuesday’s Arc closing price of $7.76.
The combined company is to operate as Arc Resources and remain headquartered in Calgary. Arc CEO Terry Anderson is to continue in his role while Seven Generations CEO Marty Proctor is to become vice-chair.
Arc and Seven Generations say they expect to generate cost savings from synergies of about $110 million per year by 2022 while continuing to pay Arc’s quarterly dividend of six cents per share.
The merged company is to be Canada’s largest producer of condensate, a light oil prized as a diluent to be mixed with oilsands bitumen so it will flow in a pipeline. It would be its third-largest natural gas producer.
Overall combined production is expected to total more than 340,000 barrels of oil equivalent per day this year, composed of about 138,000 barrels per day of liquids like condensate and 1.2 billion cubic feet per day of natural gas.
The companies are among the largest drillers into the Montney, a sprawling underground formation that straddles the Alberta-B.C. border.
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