Whitecap Resources Inc. is buying TORC Oil & Gas Ltd. for $565 million in an all-stock deal, plus the assumption of $335 million in TORC debt, the companies announced Tuesday.

Under the terms of the deal, TORC shareholders will receive 0.57 shares of Whitecap for each of their existing shares, marking a consolidation in the Canadian mid-cap energy industry.

The deal value represents a zero-premium offer for TORC, a relative rarity in the oil-and-gas sector. While such deals have become more commonplace in the precious metals industry, it’s been uncommon to see such transactions in the energy sector.

The boards of both Whitecap and TORC have unanimously endorsed the deal, which is expected to close by February 25, 2021. Whitecap management will continue to helm the company after the transaction closes. The combined entity is forecast to produce an average of 99,000 to 101,000 barrels of oil equivalent per day.

In a release, Whitecap President and Chief Executive Officer Grant Fagerheim said the size and scope of the combined entity would help it weather the continued uncertainty due to demand shocks caused by the pandemic.

“We are combining two strong Canadian energy producers to form a leading large-cap, light oil company geared towards generating sustainable long-term returns for shareholders while prioritizing responsible Canadian energy development,” he said.

“Despite the challenging conditions and significant volatility throughout the year, we have become an even stronger and more resilient energy producer entering 2021 with the combination with TORC as well as the NAL transaction.”

Whitecap announced its $155 million all-stock acquisition of NAL Resources Inc. in August. That transaction is expected to close January 4, 2021.

Whitecap also plans to increase its monthly dividend by six per cent as a result of the deal, to $0.01508 per share from $0.01425, effective in March 2021.