Veren (VRN.US) and Whitecap have agreed to a $15 billion merger, creating Canada's largest light oil producer.

Veren (VRN.US) and Whitecap Resources (SPGYF.US) announced a merger agreement on Monday, creating a leading light oil and condensate producer in the Montney and Duvernay areas of Alberta, Canada. The combined company will have a daily production of 370,000 barrels of oil equivalent, making it the largest light oil producer in Canada and the seventh largest producer in the Western Canadian Sedimentary Basin with significant gas growth potential. Under the terms of the transaction, Veren shareholders will receive 1.05 shares of Whitecap common stock for each share of Veren common stock. The combined company will be led by the existing Whitecap management team and will retain the Whitecap name. Four Veren directors, including current Veren president and CEO Craig Bryksa, will join the Whitecap board. The combined company will be the largest producer in the Kaybob Duvernay and Montney areas of Alberta, with a daily production of 220,000 barrels of oil equivalent, and will be second in Saskatchewan. Veren and Whitecap said they expect to achieve more than $200 million in annual synergies, which will be unaffected by commodity prices, immediately boosting Whitecap's per share independent and free cash flow by 10% and 26%, respectively.