UPDATE: Whitecap Resources Starts Lower; Announces Compass Petroleum Acquisition, Increased 2012 Guidance; Compass Jumps 23%
Whitecap Resources Inc. (WCP.TO) opened lower to $8.01 at today's session but has further dropped to $7.80, about 4% off from yesterday's $8.15 close, following its announcement that it has entered into an arrangement agreement to acquire all the issued and outstanding common shares of Compass Petroleum Ltd. (CPO.V).
Under the terms of the transaction, Compass shareholders will receive either 0.205 of a Whitecap common share or $1.60 in cash, subject to an aggregate cash maximum of $20 million and a maximum distribution of approximately 10.9 million Whitecap common shares.
Whitecap also announced today its revised 2012 guidance that has cash flow increasing 23% to $179 million, average production increasing 20% to 11,000 boe/d, exit production increasing 21% to 12,200 boe/d and capital spending increasing 23% to $185 million from the previous guidance provided.
CPO shares started the session higher at $1.54 but has moved up further to $1.55 after a 23% jump from yesterday's $1.26 close. More than 1.2 million shares have already changed hands.
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