Equal Energy Jumps as Strategic Review Begins

Equal Energy Ltd. (EQU), an oil and natural- gas producer with assets in Canada and the U.S., gained the most in seven months after saying it’s considering options including a sale of the company.

Equal Energy rose 11 percent to C$3.34 at 10:30 a.m. in Toronto. The Calgary-based company earlier gained more than 14 percent, the most intraday since Sept. 27. The shares had fallen 59 percent in the last year through yesterday.

Equal Energy has formed a special committee of directors, and options include a sale of the company, divesting assets, a merger or acquisitions, it said in a statement yesterday after the close of regular trading.

“The board of directors believes that the company’s shares trade at a significant discount to the value of the underlying assets,” it said. The process wasn’t a result of any particular offer, Equal Energy said.

The special committee has hired Bank of Nova Scotia to advise it. It hasn’t set a definite schedule to complete the process, the company said.

Equal Energy’s shares have been trading at a “significant discount” to its net asset value, Kevin Shaw, a Calgary-based analyst at Casimir Capital Ltd., said in a telephone interview.

“I don’t disagree with what the Equal board is doing,” he said. “It’s a sizeable company, they’ve got some decent cash flows and, their gas-assets aside, their oil assets are worth considerably more than their current trading price.”

To contact the reporter on this story: Liezel Hill in Toronto at lhill30@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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