Canadian Junior Eyes Norwegian Opportunities

Canadian oil and gas producer Zenith Energy has announced an all-stock takeover of Norwegian junior Nordic Petroleum, as it eyes opportunities in Norway’s oil and gas sector.

Zenith, listed in Toronto and London, said in a stock filing on November 4 that it had formalised an offer for Nordic, whose net value is estimated at krone 8.8mn ($970,000). Under the offer, Zenith will exchange each of its shares for 100 shares in Nordic, in order to gain at least 90% control of its equity.

Nordic’s primary activity is in heavy oils in Alberta, Canada, though it does not generate any revenue. Zenith plans to take the company in a different direction, using it as a vehicle to acquire mature production assets and potentially take part in licensing rounds in Norway.

“The board of directors views Norway as an ideal environment for the development of junior energy companies such as Zenith on account of its highly specialised investor community and the country’s long history of successful energy production,” Zenith CEO Andrea Cattaneo said.

By establishing a foothold in Norway, Zenith will not only position itself to obtain Norwegian assets but also to attract support from long-term Norwegian institutional investors, he said.

“The offer from Zenith represents an opportunity for our shareholders,” Nordic chairman Per Gunnar Loge said. “While Nordic has struggled with a position in a cumbersome heavy oil segment of the industry, Zenith has established a growing business in conventional petroleum segments.”

Zenith currently produces small amounts of gas in Italy and oil in Azerbaijan. The company did not say when the transaction would be closed, but noted that Nordic’s board had advised its shareholders to approve it.