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by Stockwatch Business Reporter

West Texas Intermediate crude for May delivery added 85 cents to $51.64 on the New York Merc, while Brent for May added $1.30 to $57.87 (all figures in this para U.S.). Western Canadian Select traded at a discount of $11.75 to WTI ($39.89), up from a discount of $12.05. Natural gas for May lost 1.7 cents to $2.51. The TSX energy index added 1.60 points to close at 239.12.

Grant Fagerheim's Whitecap Resources Inc. (WCP) added 23 cents to $15.30 on 3.35 million shares, on top of the 48 cents it added yesterday after closing a $110-million bought deal of subscription receipts at $13.50. It will use the money to help finance its previously announced acquisition of privately held Beaumont Energy for $587.5-million. For each Beaumont share, holders will receive 0.4 of a Whitecap share (each such share deemed to be worth $14.05), with the option to take part of the consideration in cash. The deal will expand Whitecap's position in the Viking light oil play of Saskatchewan. The company entered this play in early 2012 by buying Compass Petroleum, which was producing about 1,600 barrels of oil equivalent a day. The following couple of years saw several more acquisitions, including two more takeovers (Invicta Energy and the private Home Quarter Resources) and a $110-million asset purchase. These buys, along with drilling and waterflooding, helped Whitecap produce an average of nearly 9,300 barrels a day in 2014. (This is out of total production of about 32,450 barrels a day, with most of the rest coming from Alberta.) Beaumont's assets are currently producing about 5,100 barrels a day. Although their decline rate is high at 45 per cent, Whitecap figures it will be able to get that down to 30 per cent by the end of 2016 by, among other things, expanding Beaumont's waterfloods. This will bring the decline rate more in line with Whitecap's desired level, in the low 20s, to help support the company's 6.25-cent monthly dividend (currently yielding 4.9 per cent). The deal is expected to close on May 1. Insiders seem optimistic. SEDI filings show that eight of them subscribed for 86,780 subscription receipts in the above-mentioned bought deal.

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