Tourmaline Oil has wrapped up the previously announced C$1.45bn ($1.06bn) acquisition of rival Canadian oil and gas producer Bonavista Energy.

As announced last month, the cash and stock deal involves Tourmaline Oil paying C$725m in cash and issuing shares worth C$725m ($529m) as consideration. This is after the exclusion of Bonavista Energy’s net debt.

The closing of the deal was contingent on the receipt of customary regulatory and stock exchange approvals.

Tourmaline Oil anticipates achieving a production exit rate exceeding 600,000 barrels of oil equivalent per day (boepd) in 2023. This is inclusive of the volumes acquired through the acquisition.

The company took up the acquisition as part of its consolidation strategy in the Deep Basin in Western Canada.

Bonavista Energy, which is a natural gas liquids weighted producer, is focused on operations in Western Canada, specifically targeting the Alberta Deep Basin. Through its acquisition, Tourmaline Oil gains access to a portfolio characterised by low-decline, long-life average production of over 60,000boepd.

Based on strip pricing, Bonavista Energy’s net operating income is anticipated to reach approximately C$450m annually from 2024 to 2026, with an expected exploration and production spending of under C$225m per year on the assets.

As of 1 October 2023, Bonavista Energy had 459 million boe in proven and probable reserves. The company adds an estimated 839 gross horizontal drilling sites and rights to 1.2 million net acres of land to Tourmaline Oil.

At the time of signing the deal, Tourmaline Oil stated that the inclusion of Bonavista Energy’s assets seamlessly extend its existing operations in the Deep Basin, where it is among the largest producers in the region.

Earlier this month, the Canadian natural gas producer announced plans to launch a new North Deep Basin facility project. The objective of the project is to enhance production efficiency at the current company-operated Musreau-Kakwa plants and expedite gas processing access to 215 Lower Cretaceous horizontal locations.

Anticipated to be completed during 2025-26, the compression and pipeline project is estimated to contribute an additional 15,000boepd to the production.