Pace Oil & Gas Ltd. (TSX:PCE) is advising shareholders to support the proposed merger with AvenEx Energy Corp. and Charger Energy Corp to form Spyglass Resources Corp.
As quoted in the press release:
The Board continues to believe the Merger is in the best interest of Pace shareholders as Spyglass would be a larger entity well suited to sustaining a dividend model, with approximately 18,000 boe/d of balanced oil and gas production, a low decline rate and abundant low-risk, light-oil upside. Spyglass will be led by a management team with a track record of creating value in a dividend paying entity who also have prior experience managing the majority of the Pace assets. Spyglass has secured a $400 million senior credit facility with a syndicate of lenders that will have approximately 30% undrawn upon closing. Furthermore, the potential disposition of certain non-core properties within the combined asset base would provide a source of financing to further enhance the sustainability of the model.