On June 10, 2024, Advantage Energy Ltd. announced a definitive agreement to acquire Charlie Lake and Montney assets from a private seller for $450 million in cash, subject to adjustments and regulatory approvals. The transaction is expected to close by June 2024.

To finance the acquisition, Advantage will utilize a combination of common equity, convertible debentures, and an expanded credit facility. The corporation secured $65 million from subscription receipts and $125 million from extendible convertible unsecured subordinated debentures through a bought deal, with TD Securities Inc. and Scotiabank as joint bookrunners. An upsized $650 million revolving credit facility led by Scotiabank, National Bank of Canada, and RBC Capital Markets will further support the purchase.

The acquisition will add approximately 14,100 boe/d of production, enhance operational efficiency, and increase liquids production to 13,600 bbls/d by mid-2025. The assets include significant infrastructure and 163 net sections of Charlie Lake rights with 100 top-tier drilling locations.

Advantage expects the deal to be accretive on all key metrics, including a 24% increase in adjusted funds flow per share and a 12% increase in production per share. The transaction is valued at 3.2x operating income and $10.51 per boe of proved reserves. Legal advisors for the deal include Burnet, Duckworth & Palmer LLP for Advantage and Blake, Cassels & Graydon LLP for the Underwriters. National Bank Financial and RBC Capital Markets advised the seller.