Eni SpA to acquire First Calgary in order to beef up reserves

09 September 2008

Rome: Italian integrated energy company Eni SpA has said that it has agreed to buy First Calgary Petroleums Ltd for  C$923 million in aeal which will fetch First Calgary shareholders C$3.60 per share in cash and convertible debenture holders will receive $108,000 plus accrued interest in cash for each $100,000 par value of bonds held.

The purchase price represents a 52.5-per cent premium to the closing price of C$2.36 on the Toronto Stock Exchange (TSX) on 2 September 2008, and a 59.2 per cent premium to the 30 day weighted average trading price of C$2.26 per share prior to 2 September 2008.

Canadian oil and gas company First Calgary is actively engaged in exploration and development in Algeria and is listed on the Toronto and London AIM Stock Exchanges. It has a 75 per cent interest in the perimeter of Ledjmet (Block 405b), located in Algeria, which includes several fields, with total resources in excess of 1.3 billion barrels of oil equivalent (boe), of which approximately half is gas.

Eni has estimated the acquisition to increase its reserves by approximately 190 billion barrels of oil equivalent (mmboe) (2P) within its Algerian asset portfolio. Commencement of production is expected for 2011, with a plateau of Eni's share of production of approximately 30,000 barrels of oil equivalent per day (boepd) by 2012.

The acquisition will also ensure Eni's access to a well-skilled and experienced management, strengthening its presence in a core country in which it has been active since 1980.

Paolo Scaroni, Chief Executive Officer of Eni, said, "We are pleased to have reached an agreement with First Calgary to acquire the company. The transaction is in line with our strategy of increasing our presence in our core countries, acquiring high potential assets. We will utilize our well established expertise and experience in Algeria. to leverage operational synergies. We are committed to the successful and rapid development of these gas fields and the consequent rapid start up of an important resource for the country."