UPDATE 2-Provident Energy, Midnight Oil form new oil venture

* C$460 mln deal to form mid-sized oil & gas producer

* Provident to own 81 pct of new co, Midnight to own rest

* New co’s production seen at 13,000 boe/d

* Midnight shares up 11 pct, Provident marginally down
(Recasts; adds details, updates share movement)

April 20 (BestGrowthStock) – Provident Energy Trust (PVE_u.TO: )
agreed to combine its upstream business with Midnight Oil
Exploration Ltd’s (MOX.TO: ) oil and gas business in a C$460
million ($453.6 million) deal to form an intermediate-sized oil
and gas producer.

Provident unitholders will get C$340 million via 324
million Midnight Oil shares at C$1.05 each, while Provident
itself will get C$120 million in cash, Midnight’s Chief
Executive Fred Woods told Reuters by phone.

Each Provident unitholder will get 0.12225 shares of the
new company for every unit held, while Midnight shareholders
will get 0.1 shares of the new entity per share held, the
companies said in separate statements.
Provident will own 81 percent, while Midnight will own the
rest of the new company, which is expected to be listed on the
Toronto Stock Exchange.

Shares of Calgary-based Midnight were up 11 percent at
C$1.17, while Provident’s shares were marginally lower at
C$7.82 in late morning trade on the Toronto Stock Exchange.

The new company is expected to produce about 13,000 barrels
of oil equivalent (boe) per day and have 60 million boe of
reserves.

The new company will be run by the current management of
Midnight led by CEO Woods, and oil and liquids will constitute
one-third of its production.

Provident, which has completed crude oil and natural gas
swaps associated with its midstream business unit, said
separation of its businesses is intended to boost
competitiveness and enhance the growth profile of each business
unit.

Under the deal, Provident will have to pay a termination
fee of C$12 million, while Midnight will have to pay a
termination fee of $5 million to Provident.

TD Securities Inc is acting as financial advisor to
Provident, while National Bank Financial Inc and Cormark
Securities Inc are acting as financial advisors to Midnight.

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($1=1.014 Canadian Dollar)
(Reporting by Aftab Ahmed in Bangalore; Editing by Roshni
Menon)
([email protected]; within U.S. +1 646 223 8780;
outside U.S. +91 80 4135 5828; Reuters Messaging:
[email protected]))

UPDATE 2-Provident Energy, Midnight Oil form new oil venture