Abu Dhabi company buys PrimeWest Energy Trust for $5B

Calgary-based PrimeWest Energy Trust has agreed to sell the company to subsidiaries of Abu Dhabi's state-owned energy company in a deal worth $5 billion.

Calgary-based PrimeWest Energy Trust has agreed tosell the company to subsidiaries ofAbu Dhabi's state-owned energy company in a deal worth$5 billion.

Abu Dhabi National Energy Co.(TAQA) is offering $26.75 per unit for PrimeWest. That's a 34 per cent premium to the $19.94 closing price of the units on Friday.

Units ofPrimeWestsoared more than 31 per cent in Monday trading— jumping $6.37 to close at $26.31 on the TSX.

"PrimeWest has built a high quality asset base with a large portfolio of development opportunities," PrimeWest CEO Don Garner said in a release. "This investment by [the] purchaser will result in ongoing development and growth of the asset base."

Abu Dhabi National Energy's CEO announced last month that his firmplanned to makemore acquisitions in Canada — with a focus on oil and gas trusts, which have been batteredafter the removal of their preferential tax treatment last year.

This is the third Canadian oil and gas acquisition for the company this year.It bought Northrock Resourcesfor $2 billion in May and changed its name to TAQA North. In August,it bought Pioneer Natural Resources' Canadianassetsfor $540 million.

TAQA chief executivePeter Barker-Homek said Monday his company wants to make even more acquisitions in Canada.

"We are purposefully focused on target markets such as Canada that have limited political, price and volume risk but significant resource potential," he said during a conference call.

The TAQA-PrimeWest deal is subject to shareholder and regulatory approval.

PrimeWest is a conventional oil and gas royaltytrustthatacquires, develops, produces and sells natural gas, crude oil and natural gas liquids in Western Canada and in the U.S. Midwest. It acquired theShiningbank Energy Income Fund last May in a $1.25-billion stock swap.

Its current production totals 50,000 barrels of oil equivalent per day.