09/13/2012 06:01 EDT | Updated 11/13/2012 05:12 EST

Vero Energy and TORC Oil and Gas join forces to create new light oil company

CALGARY - Vero Energy Inc. (TSX:VRO) is joining up with privately held TORC Oil and Gas Ltd. to create a new light oil-focused company.

The combined company, dubbed New TORC, will be led by TORC's existing management team.

The deal values Vero at about $3 per share, representing a 48 per cent premium to its average trading price over the previous 10 days.

The total transaction price is $177 million, including net debt.

Both companies are focused on Alberta light oil plays such as the Cardium and Alberta Bakken.

Vero shares soared 14 per cent to $2.59 on the Toronto Stock Exchange Thursday. Some 5.4 million shares traded hands, making it one of the most active stocks on the TSX.