Birchcliff Energy Ltd. sank the most in more than three years after the Canadian oil and natural-gas explorer said it rejected two bids and is no longer seeking a buyer.
The shares fell 21 percent to C$7.01 at the close in Toronto, the biggest decline since November 2008. Before today, the shares had dropped 13 percent since the company announced it was for sale.
Birchcliff, the owner of more than half a million acres of undeveloped oil and gas prospects in Alberta, received a verbal and a written offer in response to its Oct. 3 sale announcement, the Calgary-based company said in a statement today. Neither represented “significant value for shareholders,” it said.
The company’s largest shareholder, Seymour Schulich, agreed to buy 5 million common shares for C$38.3 million. An investment syndicate led by GMP Securities LP, Cormark Securities Inc. and National Bank Financial Inc. will buy shares for C$71.9 million, according to the statement.
“Sale of a corporation at the bottom of the commodity cycle will not achieve appropriate value for Birchcliff’s shareholders,” Schulich, who holds a 26 percent stake, said in today’s statement. “I am pleased at this juncture to invest further.”
Gas accounted for 78 percent of Birchcliff’s production in 2011, according to data compiled by Bloomberg. Gas futures declined the most in a month today in New York, extending a 10-year low to settle at $2.149 per million British thermal units.