CALGARY — A group of Chinese investors has agreed to buy Calgary-based Long Run Exploration Ltd. in a deal worth about $770 million.
Long Run said Monday that Chinese investors would pay roughly $100 million in cash for the company plus assume all its outstanding debt.
The intermediate oil and gas producer has been struggling to service its debt and reported a net earnings loss of $305 million in the third quarter as low oil prices hit its bottom line.
The company said prices had worsened since it had reached a financing deal in November and so had cancelled the deal in favour of an outright sale of the company.
Long Run didn't name the Chinese investors, saying only that they have extensive experience in global oil and gas operations and have recently made controlling investments in Canada's oil and gas sector.
The buyers are paying 52 cents for each Long Run share, a 215 per cent premium to its closing price on Friday, and 75 cents on the dollar for Long Run's unsecured convertible subordinated debt.
Long Run produced the equivalent of about 31,000 of barrels of oil a day in the third quarter from assets in the Peace River Montney, the Deep Basin, and the Redwater Viking.
The Canadian Press
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