Veren (VRN.US) reaches a $15 billion merger deal with Whitecap to create Canada's largest lightweight oil producer.

Veren (VRN.US) and Whitecap Resources (SPGYF.US) announced on Monday a all-stock (including debt) merger agreement worth approximately $15 billion. The combined company will become a leading producer of light oil and condensate in the Montney and Duvernay regions of Alberta, Canada. Under the terms of the transaction, Veren shareholders will receive 1.05 shares of Whitecap common stock for each share of Veren common stock. The merged company will be led by Whitecap's existing management team and will operate under the Whitecap name. Four directors from Veren will join the Whitecap board, including current President and CEO Craig Bryksa. The combined company's daily production will reach 370,000 barrels of oil equivalent, making it the largest producer of light oil in Canada and the seventh largest producer in the Western Canadian Sedimentary Basin, with significant potential for natural gas growth. The combined company will be the largest producer in the Kaybob Duvernay and Alberta Montney regions with a daily production of 220,000 barrels of oil equivalent, ranking second in Saskatchewan. Veren and Whitecap expect to achieve over $200 million in annual synergies, unaffected by commodity prices. This will immediately enhance Whitecap's per share cash flow and per share free cash flow, increasing by 10% and 26% respectively.