CALGARY – Pieridae Energy is looking for more deals after going public through a reverse takeover of Quebec City’s Petrolia Inc.

“We wanted to do a reverse takeover that added value to our story,” Pieridae president and CEO Alfred Sorensen said after announcing his Calgary-based privately held company would buy Petrolia, which has a $17-million market cap, to go public.

Sorensen said he was also looking to raise between $200 to $300 million to buy other gas producers, either in Western Canada or in the Marcellus gas formation in Pennsylvania to source natural gas for Pieridae’s proposed US$7-billion Goldboro LNG project in Nova Scotia.

He said, however, that Alberta-based natural gas producers were not overly interested in participating in an LNG project in Atlantic Canada. “They all believe somebody else is going to solve the market problem for them,” Sorensen said.

Petrolia’s executive chairman Myron Tetreault said his company was “very excited” about the merger and the creation of an integrated, publicly traded LNG company in Canada, and said there could be more deals in Quebec. “We think there’s an opportunity for some consolidation,” he said.

Tetreault said Petrolia has drilled exploratory wells in Quebec and is the largest oil and gas permit holder in the province. It is also expecting compensation from the provincial government there as a Crown corporation is looking to exit a joint-venture with Petrolia to frack on the Island of Anticosti.

Both Sorensen and Tetreault said the Goldboro LNG project was well positioned relative to competing projects, even though some U.S. based companies have already sanctioned facilities or begun exporting LNG.

Sorensen said Pieridae has a buyer – Dusseldorf, Germany-based Uniper SE – for the LNG facility’s first liquefaction train.

“There will actually be a shortfall for LNG supply post 2020,” Tetreault said, adding that he wasn’t concerned about finding a market for the company’s LNG given the agreement with Uniper.

Royal Dutch Shell Plc released an outlook for LNG this year showing the company expects demand for LNG to increase by 50 per cent by 2020 and “the LNG industry will need to make large investments to supply demand growth after 2020.”

Shell has delayed a final investment decision on its own LNG project, proposed for Canada’s West Coast, and has not indicated when a sanctioning decision could be made. Other projects in Canada are similarly stalled.

Sorensen, however, said Pieridae has regulatory approvals and customers for the company’s Goldboro LNG project and a sanctioning decision would come as soon as it secures supply agreements and financing.

He hopes the Petrolia acquisition helps solve both of those problems, as Petrolia’s assets could eventually supply Goldboro LNG with gas, and going public through the acquisition may help the company attract new investors in the same way two American firms have recently completed reverse takeovers.

On Aug. 8, Houston-based Tellurian Inc. announced it would acquire all the outstanding shares of Denver-based Magellan Petroleum Corp., which had traded around US$1.14 per share on the NASDAQ. Over the next week, shares climbed 483 per cent to US$6.65 each.

“Copying somebody is a form of flattery,” Sorensen said of Tellurian.

It is unclear whether Tellurian’s rocketing share price can be duplicated since Woodlands, Texas-based LNG proponent NextDecade LLC acquired publicly traded Harmony Merger Corp. last month in a reverse takeover and the company’s share price has remained relatively flat.

“If [the deal structure] does what it did in the States, or even half as good as good as it did int eh States, then maybe people can be convinced,” Sorensen said.

Petrolia’s shares traded at 17 cents each before being halted on the TSX Venture exchange Monday and had not resumed trading on Tuesday.

Financial Post

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