M&A

23 November, 2009

UPDATE 1-Colonia Energy to buy Duce Oil for C$35 mln

* To issue 15 mln shares, pay C$28 mln cash to Duce

* To raise C$35 mln through bought deal financing

Nov 23 (Reuters) - Junior oil and gas explorer Colonia Energy Corp (CLA.V) said it agreed to buy privately held Duce Oil Ltd for C$35 million ($32.8 million) in a cash and stock deal to boost its oil assets.

Colonia Energy said the acquisition provides it with light oil assets and a significant position in the Bakken light oil resource play.

Colonia Energy said it will issue about 15.0 million of its common shares, at a deemed price of 20 Canadian cents per share, and pay C$28.0 million in cash to Duce shareholders.

The company also said it plans to buy working interest of Duce's minority partners for C$4.0 million in cash.

Colonia also said it agreed to raise C$35 million through a bought deal financing by selling 175 million subscription receipts at 20 Canadian cents apiece.

The underwriting of the financing will be co-led by GMP Securities L.P. and Peters & Co. Ltd, the company said.

Shares of the Calgary-based Colonia Energy closed at 20 Canadian cents Friday on the Toronto Venture Exchange.

($1=1.066 Canadian Dollar) (Reporting by R. Manikandan in Bangalore; Editing by Anil D'Silva) ((r.manikandan@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: r.manikandan.reuters.com@reuters.net))

Source: http://www.reuters.com