CALGARY - Shares in Petrobank Energy and Resources Ltd. (TSX:PBG) plunged nearly 91 per cent in the first trading day since it completed a major reorganization, but the company says that's more about the mechanics of the transaction rather than any value being lost.
The stock closed at $1.17 on the Toronto Stock Exchange on Wednesday, a drop of $11.23.
The company, referred to now as New Petrobank, announced on Monday it had completed the spinoff of its 57 per cent stake in PetroBakken Energy Ltd. (TSX:PBN), a light oil-focused company.
"What was ownership in one public company is now ownership in two public companies and the sum of the value of those two public companies is at least as good as what previously owned," said chief financial officer Peter Cheung.
The overhaul, announced in October, will see New Petrobank keep about $100 million in cash and a heavy oil business that includes patented extraction technology known as Toe to Heel Air Injection, or THAI.
Petrobank shareholders will get stock in New Petrobank as well as a proportionate share of its PetroBakken stake, which is focused on conventional light oil in the Bakken and Cardium formations.
Petrobank's shareholders will receive 1.1051 PetroBakken shares for each Petrobank share they have at the time of the conversion.
"Those shares should show up in our investors', our shareholders' accounts sometime probably next week. It does take some time for back offices to process the reorganization and get the new shares into new accounts," said Cheung.
PetroBakken shares were up 1.5 per cent to $10.40 on the Toronto Stock Exchange on Wednesday.