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Equal Energy Jumps as Strategic Review Begins

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May 4 (Bloomberg) -- Equal Energy Ltd., an oil and natural-gas producer with assets in Canada and the U.S., climbed the most in eight months after saying it’s considering options including a sale of the company.

Equal Energy rose 10 percent to C$3.33 at the close in Toronto, the biggest gain since Aug. 11. The shares have declined 27 percent this year.

The Calgary-based company has formed a special committee of directors to consider options including 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 sizable 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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