Lone Pine Resources Canada Ltd. and Arsenal Energy Inc. will combine creating a stronger E&P with a light and medium oil-weighted asset base focused on three core areas in Alberta, a June 24 press release said.

The assets of the two Canadian companies are complementary, with adjacent and overlapping land positions across certain areas including the Evi, Princess and Wheatland areas, the release said. The terms of the transaction weren't disclosed.

The combined companies' land base is about 765,600 net acres, with more than 170 unrisked internally identified drilling locations. Estimated production is about 4,000 barrels of oil equivalent per day (boe/d), with 71% oil and liquids and 29% natural gas. Proved plus probable reserves are 18,489 Mboe, at year-end 2015.

As part of the combination, shareholders of Lone Pine and Arsenal will receive common shares of a new corporation, currently referred to as New Lone Pine, in substitution for their existing shares. Upon completion of the transaction, former Lone Pine shareholders will hold 77% of the combined companies' shares and former Arsenal shareholders will hold 23% of the shares.

New Lone Pine will be led by Tim Granger as president and CEO and retain key personnel from both companies. The executive team will also include: Mimi Lai as vice president, ginance and CFO; Robert Guy as vice president, operations; and Tony van Winkoop, as vice president, exploration.

New Lone Pine's board of directors will have proportional representation from the two companies and will be led by Lone Pine's current chairman, Patrick McDonald.

National Bank Financial Inc. is Arsenal's financial adviser for the transaction. Completion of the business combination is expected in September.