Sept 16 (Reuters) - Midway Energy Ltd (MEL.TO) said on Wednesday it agreed to acquire a privately held oil and gas company for C$22.5 million ($21.05 million) cash, and would fund the deal by selling shares.
Midway said it would sell 20 million common shares to a group of underwriters at C$1.25 apiece, raising C$25 million, with an option to raise an additional C$2.5 million. The share offering is expected to close by Oct 6.
The company also expects to increase its credit facilities to C$27 million from C$21 million. It estimates about C$9.3 million of debt, excluding working capital, post acquisition.
The acquired properties are currently producing about 160 barrels of oil equivalent per day (boe/d), the company said.
Midway said these assets in the Garrington area of Alberta, along with an earlier acquisition in the same area last month, would raise production to 1,200 boe/d.
Shares of the company were up 20 percent at C$1.65 in morning trade on the Toronto Stock Exchange. ($1=1.069 Canadian Dollar) (Reporting by Prashant Mehra in Bangalore; Editing by Ratul Ray Chaudhuri)
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