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Significant Developments in Canadian Energy – For the Month of March 2017

Oil Sands / Unconventional

  • March 29, 2017 – Cenovus Energy Inc. (“Cenovus”) agreed to acquire ConocoPhillips’s 50% interest in the FCCL Partnership, which is the companies’ jointly owned oilsands venture operated by Cenovus. Cenovus is also purchasing the majority of ConocoPhillips’s Deep Basin conventional assets in Alberta and British Columbia. These assets have a combined 2017 forecast production of approximately 298,000 boe per day. Total consideration for the purchase is $17.7 billion, including $14.1 billion in cash and 208 million Cenovus common shares.
  • March 9, 2017 – Canadian Natural Resources Limited (“CNRL”) announced an agreement, subject to regulatory approvals, to acquire 70% of the Athabasca Oil Sands Project including 70% of the Scotford upgrader, as well as additional working interests in other producing and non-producing oilsands leases. CNRL has agreed with Shell Canada Limited and certain subsidiaries to acquire its 60% working interest in the Athabasca Oil Sands Project. CNRL and Shell have also agreed with Marathon Oil Corporation to jointly acquire its 20% share in Athabasca Oil Sands Project and related oilsands investments.

Conventional

  • March 24, 2017 – Total Energy Services Inc. (“Total Energy”) acquired a majority of the outstanding common shares of Savanna Energy Services Corp. (“Savanna”). Western Energy Services Corp. stated that Total Energy has taken up 51.6 % of the shares of Savanna under its hostile take-over bid.
  • March 24, 2017 – Pengrowth Energy Corporation entered into an agreement for the sale of its non-producing Montney lands at Bernadet in northeast British Columbia for cash consideration of $92 million. The Bernadet asset encompasses 36.6 sections (100% working interest) of land with no associated production.
  • March 22, 2017 – Trican Well Service Ltd. (“Trican”) and Canyon Services Group Inc. (“Canyon”) have entered into an arrangement agreement pursuant to which Trican has agreed to acquire all of the issued and outstanding common shares of Canyon on the basis of 1.70 common shares of Trican for each outstanding Canyon share. The consideration to be received by Canyon shareholders reflects a value of $6.63 per Canyon share based on the closing price of Trican shares on the Toronto Stock Exchange on March 21, 2017. The aggregate transaction value is approximately $637 million, including the assumption of approximately $40 million in Canyon debt. Upon completion of the transaction, existing holders of Trican shares and Canyon shares will collectively own approximately 56 % and 44 % of the combined company, respectively.
  • March 21, 2017 – Journey Energy Inc. (“Journey”) has entered into a purchase and sale agreement with an undisclosed private company to acquire interests in Central Alberta for an aggregate purchase price of approximately $35.6 million, comprised of $29.6 million of cash and 2.1 million common shares of Journey. The acquisition consists of approximately 2,000 boe per day of high working interest liquids-rich gas production.
  • March 20, 2017 – Pengrowth Energy Corporation announced it has entered into an agreement for the sale of a portion of its Swan Hills assets in north-central Alberta for total cash consideration of $180 million, subject to customary adjustments.
  • March 17, 2017 – Blackbird Energy Inc. (“Blackbird”) entered into a binding agreement with Knowledge Energy Inc. for the acquisition of two gross sections (two net) of Montney rights for total consideration of 1.92 million Blackbird common shares.
  • March 16, 2017 – Total Energy Services Inc. purchased, through the facilities of the Toronto Stock Exchange, 35,000 Savanna Energy Services Corp. shares.
  • March 16, 2017 – Painted Pony Petroleum Ltd. (“Painted Pony”) entered into a share purchase agreement to acquire all of the issued and outstanding shares of UGR Blair Creek Ltd., a privately held 100% controlled subsidiary of Unconventional Resources Canada LP (“URC”), a portfolio investment held in certain private equity funds advised by ARC Financial Corp. and EnCap Investments LP. Pursuant to the agreement, total consideration of 41 million common shares of Painted Pony will be issued to URC. Based on the price per Painted Pony share in respect of the offering of $5.60, total share consideration is $229.6 million.
  • March 9, 2017 – Enerplus Corporation announced agreements to sell Canadian properties located in Alberta and southwest Saskatchewan for aggregate proceeds of $67.3 million, before closing adjustments. The properties to be divested include the majority of Enerplus’s shallow gas assets, as well as its Brooks waterflood property.
  • March 9, 2017 – Northern Petroleum PLC signed an agreement to acquire production wells and facilities located in Alberta in the same area as the company’s existing Rainbow assets. The company will acquire 75% of the assets with its joint venture partner, High Power Petroleum LLC acquiring the remaining 25%.

Midstream

  • March 13, 2017 – The federal government approved NOVA Gas Transmission Ltd.’s Towerbirch Expansion Project subject to 24 binding conditions. The $439-million project will involve the construction of two new pipeline sections totalling approximately 87 kilometres along with associated facilities in northwest Alberta and northeast British Columbia.

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Significant Developments in Canadian Energy – For the Month of March 2017

Significant Developments in Canadian Energy – For the Month of February 2017

Conventional

  • February 13, 2017 – Alberta celebrated the 70th anniversary of the discovery of oil at Leduc #1, which is considered by many to be the start of the modern oil and gas industry in the province. The Government of Alberta marked the anniversary with a special presentation at the Leduc #1 Energy Discovery Centre. Attendees included Marg McCuaig-Boyd, Alberta’s Minister of Energy, Mark Scholz, President of the Canadian Association of Oilwell Drilling Contractors (CADOC), and Tim Hawkins, President of the Leduc/Devon Oilfield Historical Society. The discovery followed years of failures exploratory throughout the province, with Imperial Oil, the well’s proponent, having drilled 133 dry holes previously.
  • February 9, 2017 – Clearview Resources Ltd. closed an acquisition of assets in the Wilson Creek area of Alberta for $11.36, effective Dec. 1, 2016. Following the acquisition, Clearview’s production will be approximately 900 boe per day (roughly 50 percent oil and liquids and 50 percent gas).
  • February 1, 2017 – Alberta Investment Management Corporation (AIMCo) entered into a financing arrangement with Razor Energy Corp. AIMCo has committed a non-revolving term loan facility for a principal amount of $30 million on a four-year term, with an interest rate of 10 per cent payable semi-annually. A portion of the proceeds of the facility were used by Razor to fund the purchase price of the acquisition of certain producing oil and gas interests in the Swan Hills area of Alberta, with the remainder to be used to fund its development program and for general corporate purposes. In consideration of AIMCo providing the facility, Razor issued approximately 10.05 per cent of its outstanding common shares to AIMCO.

Oil Sands / Unconventional

  • February 13, 2017 – Malaysia’s state-owned oil company Petroliam Nasional Bhd (PETRONAS) may consider relocating its Canadian LNG export terminal project if required by Canadian government authorities, according to media reports quoting chairman Mohamad Sidek Hassan. The reports also indicated that PETRONAS has identified a potential new location for the plant to reduce costs and address environmental concerns.

Midstream / Downstream

  • February 23, 2017 – Enbridge Inc. and Spectra Energy Corp. announced that the previously announced merger of the two companies has received all required regulatory clearances under the merger agreement, including from the Canadian Competition Bureau. The transaction closed on February 27, 2017. The merged company will have an enterprise value of approximately CDN$166 billion, with an extensive, North America-wide portfolio of crude oil, liquids and natural gas pipelines, a large portfolio of strong, regulated gas distribution utilities and a growing renewable power generation position.
  • February 16, 2017 – Pembina Pipeline Corporation announced that it had entered into a 20-year infrastructure development and service agreement with Chevron Canada Limited. The agreement includes an area of dedication by Chevron, in excess of 10 gross operated townships (over 230,000 acres), located in Kaybob region of the Duvernay resource play near Fox Creek, Alberta. Under the agreement and subject to Chevron sanctioning development in the region, Chevron has the right to require Pembina to construct, own and operate gas gathering pipelines and processing facilities, liquids stabilization facilities and other supporting infrastructure for the area of dedication, together with Pembina providing long-term service for Chevron on its pipelines and fractionation facilities.
  • February 15, 2017 – Keyera Corp. announced plans for two new projects. First, a new NGL gathering pipeline system (Keylink) that will provide producers in west-central Alberta with a pipeline alternative for transporting NGLs from a number of Keyera gas plants. The estimated cost will be $147-million with an in-service date of mid-2018. Second, Keyera announced a project to expand the liquids handling capacity at the Simonette gas plant to meet customers’ growing needs. The project is expercted to cost $100 million with an in-service date of mid-2018.
  • February 13, 2017 – Gibson Energy Inc. entered into an agreement to sell its industrial propane business for cash consideration of $412 million to Superior Plus LP, which is to be completed through a series of transactions. Pursuant to an option purchase agreement and subject to the fulfilment of customary conditions, Gibson and Superior are obligated to complete the initial transaction pursuant to which Superior will pay non-refundable cash consideration of $412 million and Gibsons will grant an irrevocable option to Superior to acquire 100 per cent of the partnership units and shares of its Canwest and Stittco businesses.
  • February 2, 2017 – Suncor Energy Inc. closed the previously announced sale of its Petro-Canada Lubricants Inc. (PCLI) business to a subsidiary of HollyFrontier Corporation for gross proceeds of $1.125 billion, subject to customary closing adjustments.
Significant Developments in Canadian Energy – For the Month of February 2017

Significant Developments in Canadian Energy – For the Month of December 2016

Conventional

  • December 15, 2016 – Athabasca Oil Corporation entered into agreements with Statoil ASA and its wholly owned subsidiary Statoil Canada Ltd. to acquire their Canadian thermal oil assets for consideration of $435 million cash, 100 million common shares and contingent value payments triggered at oil prices above US$65 per bbl WTI.
  • December 14, 2016 – Toro Oil & Gas Ltd. entered into a definitive agreement with Steelhead Petroleum Ltd., pursuant to which Steelhead will acquire all of the outstanding common shares and common share purchase warrants of Toro Oil & Gas Ltd. for approximately $44.1 million in cash.
  • December 12, 2016 – Delphi Energy Corp. announced that it closed its strategic agreement with its existing working interest industry partner to accelerate the development of Delphi’s liquids-rich Deep Basin natural gas play at Bigstone in northwest Alberta. Delphi Energy Corp. received approximately $31.3 million in cash for the partner’s equalization of certain working interests and the partner also paid $10.9 million to Delphi for the partner’s carried obligation of the joint drilling program.
  •  December 9, 2016 – The Court of Queen’s Bench of Alberta granted an approval and vesting order for the previously announced purchase and sale of substantially all of the assets and business of Lightstream Resources Ltd. by Ridgeback Resources Inc. for the full amount of the claims outstanding in respect of the company’s 9.875% second lien secured notes due 2019 and debt in priority to the secured notes.
  • December 9, 2016 – ARC Resources Ltd. closed the previously-announced sale of its Saskatchewan assets and operations to Spartan Energy Corp. for total cash consideration of $700 million, subject to customary post-closing adjustments. The effective date of the transaction is October 1, 2016.
  • December 8, 2016 – Spartan Energy Corp. closed its previously announced bought deal public offering, including the exercise in full of the over-allotment option, for aggregate gross proceeds of approximately $287.6 million. Prior to the completion of the prospectus offering, Spartan closed a non-brokered private placement offering for aggregate gross proceeds of $255 million. The aggregate gross proceeds from the prospectus offering and the private placement are approximately $542.6 million.
  • December 6, 2016 – Marquee Energy Ltd. announced the completion of the previously announced acquisition of Marquee Energy Ltd. by Alberta Oilsands Inc. by way of a plan of arrangement and the subsequent completion of the short-form vertical amalgamation to form the “new” Marquee Energy Ltd.
  • December 6, 2016 – Pine Cliff Energy Ltd. closed its previously announced disposition of non-core oil assets for $31.4 million, prior to any closing adjustments, consisting of $26.6 million in cash and $4.8 million in TSX-listed common shares of the purchaser. The disposed assets include approximately 500 boe per day of production weighted 94% to oil located in the Viking area of central Alberta.
  • December 5, 2016 – TransGlobe Energy Corporation entered into a definitive agreement to acquire Cardium light oil and Mannville liquid-rich gas assets in the Harmattan area of west-central Alberta for total consideration of $80 million.
  • December 5, 2016 – Bellatrix Exploration Ltd. entered into an agreement with a TSX-listed issuer to sell certain non-core assets in the Harmattan area of Alberta for $80 million, subject to customary closing adjustments. The transaction is expected to close prior to December 31, 2016, with an effective date of December 1, 2016. The $80 million purchase price will be payable $65 million in cash and $15 million in a vendor take back loan bearing interest at 10% per annum and secured by a first lien charge against the assets being sold.
  • December 2, 2016 – PrairieSky Royalty Ltd. completed four separate acquisition transactions for aggregate consideration of $117.3 million, representing approximately 460 boe per day of royalty production and over 100,000 acres of mineral title and royalty lands.
  • December 2, 2016 – BlackPearl Resources Inc. completed the sale of a gross overriding royalty interest on its Onion Lake property for $55 million. Under the terms of the agreement BlackPearl sold an approximate 1.75% royalty on production from substantially all of its Onion Lake lands.

Unconventional

  • December 15, 2016 – PrairieSky Royalty Ltd. entered into a definitive agreement with Pengrowth Energy Corporation to acquire a 4% gross overriding royalty on current and future phases of its Lindbergh SAGD thermal oil project, as well as seismic over certain lands in British Columbia and Alberta, for total cash consideration of $250 million.

Midstream

  • December 21, 2016 – Alberta Investment Management Corporation on behalf of certain of its clients, agreed to acquire an ownership stake in Howard Energy Partners from EnLink Midstream Partners, LP. The investment, representing an ownership stake of approximately 28% of Howard Energy Partners, makes the Alberta Investment Management Corporation the second largest unitholder in the company. The transaction is expected to close during the first quarter of 2017, subject to customary closing conditions.
  • December 20, 2016 – Tidewater Midstream and Infrastructure Ltd. acquired from a vendor the remaining approximate 37% working interest in the Brazeau River Complex gas plant and the remaining approximate 60% working interest in 105 kilometres of gas gathering pipelines directly connected to the BRC in addition to the remaining working interests for 100% ownership in the previously announced three proven natural gas storage reservoirs that are also directly connected to the BRC for a purchase price of $30 million in cash.
  • December 16, 2016 – Spectra Energy Corp. announced that during a special stockholder meeting, Spectra Energy stockholders voted to approve the previously announced combination of Spectra Energy with Enbridge Inc. in a stock-for-stock merger transaction. Enbridge shareholders also approved the required resolutions in connection with the merger transaction between Enbridge and Spectra at its special meeting of shareholders.
  • December 2, 2016 – Enbridge Inc. together with Enbridge Income Fund Holdings Inc. announced that it closed the previously announced sale of its South Prairie Region assets to Tundra Energy Marketing Limited for $1.075 billion in cash.
Significant Developments in Canadian Energy – For the Month of December 2016

Significant Developments in Canadian Energy – For the Month of November 2016

Conventional

  • November 29, 2016 – Raging River Exploration Inc. closed a Viking consolidation transaction. The company acquired approximately 620 boe per day — 97 per cent light oil — of production and 24 net sections of land prospective for Viking light oil, for total cash consideration of approximately CDN$58 million subject, to customary adjustments. In a separate release, Northern Blizzard Resources Inc. said it completed the sale of Viking light-oil assets in the Coleville area of Saskatchewan for cash consideration of CDN$58 million, subject to customary adjustments.
  • November 23, 2016 – Lightstream Resources Ltd. announced that sale procedures under the Companies’ Creditors Arrangement Act (CCAA) have concluded and that the credit bid submitted by the ad hoc committee of holders of approximately 91.5 per cent of the company’s 9.875 per cent second lien secured notes due 2019 is the successful bid. In accordance with the sale procedures, the company will seek to implement the credit bid by finalizing the terms of the definitive agreements and applying to the Court of Queen’s Bench of Alberta for an approval and vesting order anticipated to be heard on Dec. 8, 2016.
  • November 23, 2016 – Baytex Energy Corp. entered into an agreement to acquire heavy oil assets located in the Peace River area of northern Alberta for cash consideration of CDN$65 million, subject to customary adjustments. The assets add approximately 3,000 boe per day of production and more than double Baytex’s land base in the area. The acquisition will be funded through a concurrent $100 million bought deal financing.
  • November 18, 2016 – Spartan Energy Corp. entered into an agreement with ARC Resources Ltd. to acquire assets in southeast Saskatchewan for cash consideration of CDN$700 million, subject to customary adjustments. The acquisition will be funded through Spartan’s pro forma credit facility and through committed concurrent equity financings totalling CDN$505 million.
  • November 11, 2016 – ConocoPhillips announced plans to divest of US$5 billion to US$8 billion in assets, which will include assets in Western Canada. “These will be primarily North American gas assets, including some assets from our Western Canada Business Unit,” company spokesperson Rob Evans said, when asked following an analyst day event whether assets from Canada would be included.  “Specific details on Western Canada assets to be [marketed] are currently being worked out,” he added.
  • November 8, 2016 – Delphi Energy Corp. has entered into a non-binding Letter of Intent with an existing working interest partner. This transaction is intended to accelerate the development of its liquids-rich Deep Basin natural gas play at Bigstone in northwest Alberta. Under the LOI, the partner will undertake a CDN$40 million (gross) joint drilling program, to be completed before July 15, 2017, of which Delphi will contribute CDN$6 million while retaining a 65 percent working interest, in approximately five to six wells to be drilled at Bigstone Montney. The partner will contribute CDN$20 million in capital, along with its 35 per cent working interest share of CDN$14 million. In addition to the above drilling capital contribution, Delphi will receive CDN$30 million in cash at closing for equalization consideration.
  • November 2, 2016 – Tamarack Valley Energy Ltd. and Spur Resources Ltd. entered into an arrangement agreement providing for the acquisition by Tamarack of all the issued and outstanding common shares of Spur. As consideration, Tamarack will issue an aggregate of 90.1 million common shares of Tamarack and CDN$57.3 million in cash. Tamarack will also be assuming Spur’s net debt, estimated to be CDN$25.7 million as at Nov. 30, 2016, after accounting for proceeds from the exercise of all outstanding options of Spur, and severance and transaction costs. Based upon the previous 10-day VWAP of Tamarack of CDN$3.60 per share, the total consideration payable by Tamarack, including the assumption of debt, is approximately CDN$407.5 million.

Unconventional

  • November 7, 2016 – Woodfibre LNG will commence construction on British Columbia’s first liquefied natural gas processing and export terminal in 2017. The facility near Squamish, north of Vancouver, will export 2.1 million tonnes a year once it is operational in 2020, according to a company statement.
  • November 4, 2016 – Athabasca Oil Corporation announced an upsizing of the previously completed contingent bitumen royalty on its thermal assets with Burgess Energy Holdings L.L.C. for additional cash consideration of CDN$128.5 million. Including the initial royalty, Athabasca has now raised total cash proceeds of CDN$257 million.

Midstream

  • November 30, 2016 – The federal government announced that it had approved Kinder Morgan Inc.’s proposal to more than double the capacity of its Trans Mountain pipeline. Prime Minister Justin Trudeau also said Ottawa had vetoed Enbridge Inc.’s proposed Northern Gateway line, which would have taken crude from Alberta’s oilsands to the Pacific coast. It approved Enbridge’s plan to replace Canadian segments of Line 3, which carries crude from Alberta to Wisconsin.
  • November 16, 2016 – Tidewater Midstream and Infrastructure Ltd. entered into an agreement with to acquire an approximate 50 per cent working interest in 150 kilometres of gas gathering pipelines which are directly connected to Tidewater’s existing Brazeau River Complex (BRC), in addition to three natural gas storage reservoirs that are also directly connected to the BRC by means of the acquired pipelines, for a purchase price of CDN$15 million in cash.
  • November 3, 2016 – Union Gas announced the commercial in-service of a CDN$391 million expansion of natural gas pipeline and compression facilities that will move an incremental 0.4 PJ/d (.36 Bcf/d) of natural gas supplies through its Dawn-Parkway System, which links markets in eastern Canada and the northeast U.S. with the Dawn Hub. The facilities placed into commercial service comprise approximately 20 kilometres of 48-inch diameter pipeline between Hamilton and Milton, Ont., and an additional compressor facility at the existing Lobo Compressor Station near London.

Petrochemicals Manufacturing

  • November 4, 2016 – A part of the acquisition by Inter Pipeline Ltd.  (IPL) of The Williams Companies Inc.’s and Williams Partners L.P.’s  Canadian natural gas liquids midstream businesses, IPL assumes responsibility for the potential construction of a CDN$1.85 billion propane dehydrogenation (PDH) facility located near the Redwater Olefinic Fractionator. This facility would convert locally sourced propane into more valuable polymer grade propylene. Inter Pipeline is also assessing the commercial viability of constructing an additional processing facility, which would convert propylene into polypropylene, a solid plastic used in manufacturing a wide range of finished products. The preliminary estimate for the polypropylene facility is approximately CDN$1.3 billion. IPL is currently pursuing long-term, fee based offtake agreements with a number of global plastics manufacturing and marketing companies. Subject to securing appropriate commercial contracts, Inter Pipeline anticipates making final investment decisions on the PDH and polypropylene facilities by mid-2017, with both plants operational by mid-2021.

Oilfield Services

  • November 24, 2016 – Calfrac Well Services Ltd. entered into an agreement with Peters & Co. Limited, as lead underwriter on behalf of a syndicate of underwriters, pursuant to which the underwriters have agreed to purchase, on a private placement basis, 14,040,000 common shares of Calfrac at a price of CDN$2.85 per share for total gross proceeds of approximately CDN$40 million.
  • November 24, 2016 – Total Energy Services Inc. announced an intention to make an offer to purchase all of the issued and outstanding common shares of Savanna Energy Services Corp. for consideration consisting of common shares of Total. Total anticipates that, if the offer is successful, holders of Savanna shares will receive, in exchange for each Savanna share, 0.1132 of a common share of Total.
  • November 23, 2016 – Alberta Investment Management Corporation (AIMCo) signed a letter of commitment and a subscription agreement, on behalf of certain of its clients, to enter into a strategic financing relationship with Savanna Energy Services Corp. The financing relationship provides for a CDN$200 million debt-with-warrants financing and a private placement of 13 million common shares of Savanna at a price of CDN$1.45 per common share for gross proceeds of CDN$18.85 million.
Significant Developments in Canadian Energy – For the Month of November 2016

Significant Developments in Canadian Energy – for the Month of October 2016

Conventional

  • October 3, 2016 – DualEx Energy International Inc. has entered into an Alberta oil and gas asset purchase and sale agreement, and has also entered into two private Alberta oil and gas company share purchase agreements.
  • October 3, 2016 – Journey Energy Inc. (“Journey”) announced the closing of the disposition of an aggregate of 16.36 million common shares and restricted voting shares in the capital of Journey by Infra-PSP Partners Inc. pursuant to a share purchase agreement dated September 15, 2016.
  • October 6, 2016 – Velvet Energy Ltd., a private oil and liquids-rich natural gas producer in the Deep Basin of Alberta, has completed a private placement of US$125 million of senior secured second lien notes due 2023.
  • October 7, 2016 – Devon Energy Corp. has completed the sale of its 50% ownership interest in Access Pipeline to Wolf Midstream Inc., a portfolio company of Canada Pension Plan Investment Board, for C$1.4 billion.
  • October 7, 2016 – Alberta Investment Management Corporation has successfully entered into a strategic financing relationship with Journey Energy Inc. Journey Energy Inc. has completed a private placement of an aggregate of 30,000 units to Alberta Investment Management Corporation at a price of $1,000 per unit for aggregate gross proceeds of $30 million.
  • October 11, 2016 – Canbriam Energy Inc. purchased the British Columbia assets of Northpoint Resources Ltd. through the court appointed receiver for cash consideration of $7.5 million.
  • October 12, 2016 – SemCAMS entered into a 15-year agreement with NuVista Energy Ltd. to proceed with building a project that will have the capacity to process up to 200 mmcf per day of raw sour gas and 20,000 bbls per day of condensate in the Wapiti area of Alberta.
  • October 18, 2016 – Suncor Energy Inc. and Mikisew Cree First Nation signed a participation agreement for the purchase by Mikisew Cree First Nation of a 14.7% interest in Suncor’s East Tank Farm Development. Under the terms of the agreement, Mikisew Cree First Nation will pay 14.7% of the actual capital cost of the East Tank Farm Development once the assets become operational, which is currently anticipated to be in the second quarter of 2017.
  • October 21, 2016 – Tourmaline Oil Corp. has entered into an agreement with Shell Canada Energy to acquire strategic assets in the Alberta Deep Basin and the northeast B.C. Montney Complex for total consideration of $1.369 billion (before customary adjustments) including cash consideration of $1 billion and the remainder in Tourmaline common shares.
  • October 24, 2016 – Logan International Inc., which manufactures and sells drilling and production tools, announced that it acquisition by Rubicon Oilfield International UK Acquisition Co Limited, a wholly-owned subsidiary of Rubicon Oilfield International Holdings, L.P., by way of an arrangement under the Business Corporations Act (Alberta), has been completed. All of the outstanding common shares of Logan International Inc. were acquired for $1.49 per share.
  • October 27, 2016 – Husky Energy Inc. closed several outstanding Western Canada asset sales, in line with its objective to build a more capital efficient business with reduced sustaining capital requirements. In aggregate, about 27,000 boe a day, including royalty interests, has been sold in 2016 for gross proceeds of $1.3 billion.
  • October 31, 2016 – Suncor Energy Inc. announced it has reached an agreement to sell its Petro-Canada Lubricants Inc. business to a subsidiary of HollyFrontier Corporation for $1.125 billion, subject to customary closing adjustments.
  • October 31, 2016 – RMP Energy Inc. announced this morning the transformational sale of its Ante Creek asset for cash consideration of $114.3 million, subject to normal and customary closing adjustments.
  • October 31, 2016 – Vertex Resource Group Ltd. announced it has acquired Red Giant Energy Services Ltd., an oilfield service company specializing in storage, management and logistics of oilfield fluids in the Western Canadian Sedimentary Basin.
  • October 31, 2016 – Lightstream Resources Ltd. announced that the first phase of the sale procedures under the Companies’ Creditors Arrangement Act, in which non-binding indications of interest were received and considered, has concluded and, accordingly, qualified bidders will move to the second phase of the sale procedures. The company also confirmed that its common shares were delisted from trading on the Toronto Stock Exchange on October 27, 2016.
  • General Electric Co. (“GE”) and Baker Hughes Inc. announced that the companies have entered into an agreement to combine GE’s oil and gas business and Baker Hughes to create an oilfield technology provider with service and equipment capabilities and $32 billion of combined revenue and operations in more than 120 countries.

Midstream

  • October 20, 2016 – AltaGas Ltd. announced that its board approved an investment decision for the construction, ownership and operation of the North Pine facility, to be located approximately 40 kilometres northwest of Fort St. John, B.C. AltaGas will be constructing the North Pine facility with two NGL separation trains each capable of processing up to 10,000 bbls per day of propane plus NGL mix (C3+), for a total of 20,000 bbls per day. Site preparation for the first NGL separation train is expected to begin in the first quarter of 2017, with an expected commercial onstream date in the second quarter of 2018. The second 10,000 bbl-per-day NGL separation train is expected to follow after completion of the first train.

 

Significant Developments in Canadian Energy – for the Month of October 2016

Significant Developments in Canadian Energy – For the Month of September 2016

Conventional

  • September 27, 2016 – In connection with a state visit to China by Canadian Prime Minister Justin Trudeau, Sinoenergy Corporation Ltd. announced its intention to support the operations of Long Run Exploration Ltd. by the injection of an additional CDN$500 million in investment over the next two years
  • September 23, 2016 – Goldman, Sachs & Co. acquired 14.79 million common shares of Prairie Provident Resources Inc. in connection with the business combination of Lone Pine Resources Canada Ltd. and Arsenal Energy Inc. to form Prairie Provident. GS&Co now beneficially owns, controls and directs more than 10 per cent of the outstanding common shares of the amalgamated company.
  • September 20, 2016 – Encana Corporation announced a public offering of 107 million common shares at a price of US$9.35 per share, for gross proceeds of US$1 billion. Encana intends to use roughly half of the net to fund a portion of its 2017 capital program. The majority of this capital program is expected to be allocated to growing Encana’s Permian production.
  • September 20, 2016 – InPlay Oil Corp. and Anderson Energy Inc. announced an agreement to combine to create a new, Cardium-focused producer. InPlay also announced an agreement to acquire Cardium light oil assets in the Pembina region of Alberta from Bellatrix Exploration Ltd. for total consideration of $47 million, made up of $42 million cash, and 16.67 million shares of InPlay having a deemed value of $5 million (30 cents per share).
  • September 12, 2016 – Imperial Oil Limited announced that it will be seeking a buyer for its interest in the Norman Wells Oil Field in the Northwest Territories, though a definitive decision to sell the assets has not been made.
  • September 9, 2016 – Suncor Energy Inc. announced that it will issue an aggregate of $1 billion of senior unsecured Series 5 medium term notes. The offering will be conducted in two tranches consisting of $700 million of senior unsecured Series 5 medium term notes maturing on Sept. 14, 2026, and $300 million of senior unsecured Series 5 medium term notes maturing on Sept. 13, 2046.
  • September 9, 2016 – Crescent Point Energy Corp. entered into an agreement, on a bought deal basis, to sell 33.7 million common shares at $19.30 per share to raise gross proceeds of approximately CDN$650 million. Crescent Point increased its fourth quarter capital budget by $150 million, resulting in budgeted annual capital expenditures of $1.1 billion for 2016.

Unconventional

  • September 27, 2016 – the Government of Canada announced its approval, subject to conditions, of Progress Energy’s Pacific North West LNG project. The announcement was made at an evening press conference held in Richmond, British Columbia by federal Ministers Catherine McKenna (Environment), Jim Carr (Natural Resources), and Dominic LeBlanc (Fisheries, Oceans and the Canadian Coast Guard). PETRONAS, the parent company of Progress Energy, subsequently announced that it will be reviewing the project internally in light of the conditions to approval imposed by the federal government and prevailing market conditions.
  • September 19, 2016 – Seven Generations Energy Ltd. announced that it had entered into a development agreement with Steelhead LNG to explore infrastructure development and open new overseas markets for Canadian natural gas. 7G also acquired a minority ownership interest in Steelhead LNG.
  • September 16, 2016 – The Alberta government approved three new oilsands proposals: (a) the Blackpearl Resources Inc. Blackrod SAGD development; (b) the Surmont Energy Ltd. Wildwood oilsands SAGD development; and (c) the Husky Energy Inc. Saleski oilsands development. Collectively these projects represent about $4 billion of potential investment into Alberta’s economy and about 95,000 bbls per day of production.

Midstream

  • September 29, 2016 –Enbridge Inc. announced an agreement for the sale of liquids pipelines assets in the South Prairie Region to Tundra Energy Marketing Limited for $1.075 billion in cash. Closing of the transaction is expected to close in the fourth quarter of 2016.
  • September 26, 2016 – TransCanada Corporation announced that its wholly-owned subsidiary, Columbia Pipeline Group, Inc. has offered to acquire, for cash, all of the 53.84 million outstanding common units of the master limited partnership, Columbia Pipeline Partners, LP at a price of US$15.75 per common unit (aggregate US$848 million). This represents an 11.3 per cent premium to the 30-day average closing price on September 23, 2016.
  • September 7, 2016 – Veresen Inc. announced that Veresen Midstream secured CDN$650 million of new credit facilities, which will be primarily used to fund Veresen Midstream’s contracted capital projects under construction, including the Sunrise, Tower and Saturn processing facilities.
  • September 6, 2016 – Enbridge Inc. and Spectra Energy Corp. entered into a definitive merger agreement under which Enbridge and Spectra Energy will combine in a stock-for-stock merger transaction, which values Spectra Energy common stock at approximately CDN$37 billion (US$28 billion), based on the closing price of Enbridge’s common shares on September 2, 2016. The combination will create the largest midstream energy company in North America and one of the largest globally based on a pro-forma enterprise value of approximately CDN$165 billion (US$127 billion). The transaction was unanimously approved by the boards of directors of both companies and is expected to close in the first quarter of 2017, subject to shareholder and certain regulatory approvals, and other customary conditions.
  • September 2, 2016 – Enbridge Inc. announced that its affiliate, Enbridge Energy Partners, L.P. (EEP), will defer its US$2.6 billion Sandpiper project in the Bakken and withdraw associated regulatory applications currently before the Minnesota Public Utilities Commission. EEP decided that the project should be delayed until crude oil production in North Dakota recovers sufficiently to support development of new pipeline capacity.

Alternative / Green

  • September 20, 2016 – In connection with Alberta’s Climate Leadership Plan, the provincial government announced the appointment of a task force to provide recommendations on government investment into “climate technology.” The appointees are: Gordon Lambert, chair; W.L. (Vic) Adamowicz; Shelly Vermillion; Suzanne West and Sara Hastings-Simon.
  • September 19, 2016 – Canadian Environment Minister Catherine McKenna announced that Canada will impose a carbon price on provinces that do not adequately regulate emissions by themselves. Details of this new carbon price and how it will be implemented have not yet been announced.
Significant Developments in Canadian Energy – For the Month of September 2016

Significant Developments in Canadian Energy – For the Month of August 2016

Conventional

  • August 2, 2016 – Quattro Exploration and Production Ltd. has signed a letter of intent for the sale of certain oil and gas production facilities and lands in Western Canada to an Alberta-based oil and gas exploration and production company. The aggregate purchase price for the acquisition is $24.25 million including cash payments totalling $8 million, the issuance of four million class A common shares at a price of $0.05 per common share, representing a minimum 12.5% of the seller’s common shares outstanding at closing and the assumption of estimated decommissioning liabilities totaling $12.25 million.
  • August 2, 2016 – Canadian Energy Services & Technology Corp. has completed the acquisition of all of the production and specialty chemical business assets of Catalyst Oilfield Services, LLC.
  • August 2, 2016 – Williams and Williams Partners are expected to finalize the agreement on the sale of their Canadian business during the third quarter of 2016, with expected combined proceeds in excess of $1 billion. Williams Partners’ share will be in excess of $800 million and will help reduce the need for external capital-funding.
  • August 5, 2016 – GMP Capital Inc. has agreed to acquire FirstEnergy Capital Corp. Under the definitive purchase agreement, GMP will acquire FirstEnergy for total consideration on closing of $98.6 million, consisting of approximately $58.9 million in restricted GMP common shares, with the remainder being paid by GMP through the issuance of an unsecured promissory note.
  • August 10, 2016 – Keyera Corp. has acquired an additional 35% ownership interest from Bellatrix Exploration Ltd. in the O’Chiese Nees-Ohpawganu’ck gas plant and the associated gathering pipelines. Total consideration for the acquisition was $112.5 million, which included the additional working interest in the facilities, a 10-year take-or-pay commitment, an area dedication agreement and a prepayment of 35% of the estimated future construction costs of Phase 2 of Alder Flats.
  • August 15, 2016 – Tidewater Midstream and Infrastructure Ltd. has entered into a take or pay agreement with a new customer, for approximately all of the current spare capacity at the Brazeau River Complex on a two-year basis beginning in Q4 2016.
  • August 15, 2016 – Tidewater Midstream and Infrastructure Ltd. entered into an agreement to acquire a 100% working interest in a 33 mmcf per day sour, deep-cut gas processing facility, 250 kilometres of related pipelines and 600 acres of heavy industrial land at west Edmonton for total cash consideration of $11 million, which includes a five-to-ten year take or pay agreement with the related upstream production.
  • August 17, 2016 – Enerflex Ltd. has entered into an agreement, on a bought deal basis, with a syndicate of underwriters led by Scotiabank and TD Securities Inc., pursuant to which the underwriters have agreed to purchase 7.79 million common shares of Enerflex at a price of $12.85 per common share for gross proceeds of approximately $100 million. The company has granted the underwriters an option to purchase up to an additional 1.17 million common shares at the same price and on the same terms as the offering, exercisable in whole or in part at any time up until the date which is 30 days following the closing of the offering. If the over-allotment option is exercised in full the total gross aggregate proceeds will be approximately $115 million.
  • August 18, 2016 – Seven Generations Energy Ltd. closed its acquisition of Montney natural gas assets from Paramount Resources Ltd. for approximately $1.9 billion in total consideration consisting of cash, Seven Generations shares and the assumption of a portion of Paramount’s debt.
  • August 19, 2016 – Perisson Petroleum Corporation has completed the final stage of the closing process related to the purchase of the Twining assets by completing the final statement of adjustments related to the purchase.
  • August 24, 2016 – Horizon North Logistics Inc. has completed the acquisition of Empire Camp Equipment Ltd. which provides camp and well site buildings for the Energy, Mining & Construction sectors.
  • August 25, 2016 – Ikkuma Resources Corp. has completed a strategic acquisition of certain Foothills natural gas assets for $2.7 million.
  • August 26, 2016 – Altura Energy Inc. has entered into an agreement to purchase high-quality oil assets located in east-central Alberta. The acquisition is expected to close on September 21, 2016 for cash consideration of $4 million, subject to closing adjustments.

Midstream

  • August 3, 3016 – Bear Paw Pipeline Corporation Inc., an indirect wholly owned subsidiary of Liquefied Natural Gas Limited received approval from the Nova Scotia Utility and Review Board to construct a 62.5 kilometre natural gas pipeline from Goldboro to the proposed Bear Head LNG export facility in Point Tupper, Richmond County, Nova Scotia.
  • August 8, 2016 – Inter Pipeline Ltd. has entered into an agreement to acquire the shares of the Williams Companies Inc.’s and Williams Partners L.P.’s Canadian natural gas liquids midstream businesses for cash consideration of $1.35 billion, subject to closing adjustments. The transaction is expected to close in the third quarter of 2016 and is subject to approval under the Competition Act.
Significant Developments in Canadian Energy – For the Month of August 2016

Significant Developments in Canadian Energy – For the Month of July 2016

Conventional

  • July 26, 2016 – TORC Oil & Gas Ltd. entered into an agreement with Zargon Oil & Gas Ltd. to acquire light oil assets in southeast Saskatchewan. The acquisition includes 1,120 boe per day (roughly 95 per cent light oil and liquids) of producing assets for total cash consideration of $89.5 million, subject to customary closing adjustments.
  • July 13, 2016 – In response to industry requests, the Alberta government announced that oil and gas producers can apply to opt in to Alberta’ new Modernized Royalty Framework for wells that otherwise would not have been drilled. This represents a change to the previously announced schedule, which had the Modernized Royalty Framework slated to take effect January 1, 2017. The stated intent of this change is to allow producers to make new investments, or decide to keep investments in Alberta. Further discussion of the Modernized Royalty Framework can be found in previous Dentons articles, available here and here.
  • July 6, 2016 – Seven Generations Energy Ltd. (7G) reached an agreement to acquire approximately 30,000 bbls of oil equivalent of daily production, 155 net sections in the Montney play having 199 million boe in proved reserves from Paramount Resources Ltd. for approximately CAD$1.9 billion in total consideration consisting of cash, 7G shares and the assumption of a portion of Paramount’s debt. This acquisition will significantly expand 7G’s ownership in the Montney Nest liquids-rich natural gas play.

Midstream

  • July 18, 2016 – Husky Energy Inc. closed a transaction to create a new entity, Husky Midstream Limited Partnership, which will assume ownership of certain midstream assets in the Lloydminster region of Alberta and Saskatchewan. Husky received $1.7 billion in cash proceeds from the transaction, which will be applied to strengthening the company’s balance sheet.
  • July 15, 2016 – TransCanada Corporation announced the signing of a memorandum of understanding with four major unions and the Pipe Line Contractors Association of Canada for work on the Energy East pipeline project. The MOU provides that thousands of the skilled pipeline trade jobs required to build the project will be awarded to members of the PLCAC and the four union partners, including the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Labourers International Union of North America, International Union of Operating Engineers and Teamsters Canada.
  • July 15, 2016 – Reuters, citing sources familiar with the situation, reported that Williams Cos. Inc. attracted at least seven bidders for the sale of its Canadian business unit, which could pay up to $2 billion for the acquisition.
  • July 14, 2016 – Devon Energy Corporation announced that it had entered into a definitive agreement to sell its 50 per cent interest in Access Pipeline to Wolf Midstream Inc., a portfolio company of Canada Pension Plan Investment Board, for consideration of CAD$1.4 billion

Alternative / Green

  • July 18, 2016 – Canada’s Energy minister, Catherine McKenna, announced that the Canada will implement a national price on carbon emissions by the end of this year. The federal government will publish an emissions reduction plan this fall that could include expanded, standardized emissions disclosure requirements for companies. Currently, the provinces are working on an agreement that could see the provinces implementing a mandatory carbon price. Not all provinces support this initiative, and the effect of the proposed federal provincial carbon price on existing provincial measures has yet to be determined.
Significant Developments in Canadian Energy – For the Month of July 2016

Alberta announces new drilling incentive programs

The Government of Alberta recently announced the introduction of two new drilling incentive programs that will commence on January 1, 2017: the Enhanced Hydrocarbon Recovery Program and the Emerging Resources Program. These new programs will replace the drilling incentive programs that are currently in effect. This announcement follows from recommendations made in the Alberta’s Royalty Review Panel’s report of January 29, 2016, which recommended the implementation of a new modernized oil and gas royalty framework. Further discussion of the new drilling incentive programs, as well as background on Alberta’s new modernized oil and gas royalty framework, can be found here.

Alberta announces new drilling incentive programs

Significant developments in Canadian energy – for the month of June 2016

Conventional

  • June 22, 2016 – In response to the Redwater decision (discussed below) and pending the outcome of an appeal, the Alberta Energy Regulator (AER) implemented interim changes to its regulatory measures “to minimize risks to Albertans.” Among these changes, the AER will require all transferees of existing well licenses to demonstrate that they have a liability management ratio (LMR) of 2.0 or higher immediately following the transfer. In response to industry concerns, the AER subsequently indicated that it will assess whether to implement the interim changes on a case-by-case basis. Additional Dentons commentary on the AER changes can be found here.
  • June 21, 2016 – Encana Corporation entered into an agreement to sell its Gordondale assets in northwestern Alberta to Birchcliff Energy Ltd. for a total cash consideration of C$625 million. The sale includes approximately 54,200 net acres of land and associated infrastructure.
  • June 17, 2016 – Longshore Resources Ltd. announced the closing of an acquisition of certain producing assets in the Peace River Arch area of Alberta and the closing of a $150 million equity financing by ARC Financial Corp.
  • June 13, 2016 – Penn West Petroleum Ltd. announced that it had entered into a definitive agreement for the sale of all of its Saskatchewan assets, including its Dodsland Viking area, for cash consideration of $975 million, subject to normal closing adjustments. The purchaser is Teine Energy Ltd., a Viking producer backed by the Canada Pension Plan Investment Board.
  • June 8, 2016 – Suncor Energy Inc. entered into an agreement to sell 71.5 million common shares from treasury, on a bought deal basis, at a price of $35 per share. Net proceeds will be used for the previously announced acquisition of an additional five per cent interest in the Syncrude Canada Ltd. oilsands joint venture and to reduce outstanding indebtedness.
  • June 3, 2016 – The Alberta Court of Queen’s Bench decision in the Redwater Energy Corp. sparked widespread debate regarding who pays for the remediation of Alberta’s orphan wells. At issue in the Redwater case was whether trustees managing insolvent oil companies may “cherry-pick” among a bankrupt producer’s oil and gas assets, selectively disclaiming properties, along with any attached environmental liability. Alberta Chief Justice Neil Wittmann ruled that insolvency trustees could ‘renounce’ assets. Dentons analysis of the Redwater case can be found here.
  • June 1, 2016 – Raging River Exploration Inc. and Rock Energy Inc. entered into an agreement for the acquisition by Raging River of all the issued and outstanding Rock common shares, pursuant to a plan of arrangement. Rock’s assets include 2,550 boe per day (95 per cent oil) of production and approximately 25 net sections of land prospective of Viking light oil in the Kerrobert area of southwest Saskatchewan. Through this transaction, Raging River is also acquiring interests in heavy oil assets at Mantario (Laporte) and Onward, both in southwest Saskatchewan.

Unconventional

  • June 20, 2016 – Athabasca Oil Corporation granted a contingent bitumen royalty to Burgess Energy Holdings LLC on its thermal assets for total consideration of $129 million. Concurrently, the company repaid its US$221 million first lien term loan.
  • June 16, 2016 – Bear Head LNG Corporation, Inc. has received Governor in Council approval for a licence to import natural gas from the United States and a licence to export LNG from its project site on the Strait of Canso in Richmond County, Nova Scotia. The National Energy Board’s approval was previously issued in August 2015, but was subject to the approval of the Governor in Council.

Midstream

  • June 14, 2016 – TransCanada Corporation announced that its joint venture with IEnova, Infraestructura Marina del Golfo (IMG) has been chosen to build, own and operate the US$2.1-billion Sur de Texas-Tuxpan natural gas pipeline in Mexico. The project will be supported by a 25-year natural gas transportation service contract for 2.6 bcf a day with Mexico’s state-owned power company, the Comisión Federal de Electricidad.
  • June 2, 2016 – The National Energy Board recommended that the federal government approve NOVA Gas Transmission Ltd.’s (NGTL) proposed expansion to its existing system in northern Alberta. The board’s final report, released Wednesday, lists 48 conditions that NGTL would have to meet should the project go ahead. On March 31, 2015, NGTL applied to the board to construct and operate approximately 230 kilometres of pipeline in five pipeline section loops and two compressor station unit additions in northern Alberta, mostly adjacent to existing sites. The total estimated cost of the project is $1.29 billion and the planned in-service date is April 1, 2017.

Off-Shore

  • June 10, 2016 – Statoil completed the drilling of nine wells using the Seadrill West Hercules in the Flemish Pass Basin. The drilling program included four exploration wells in the vicinity of the 2013 Bay du Nord discovery, as well as three appraisal wells on the discovery. In addition, two exploration wells were drilled in areas outside the Bay du Nord discovery.
  • June 8, 2016 – Royal Dutch Shell plc has voluntarily contributed more than 860,000 hectares of offshore exploratory permits in the waters of Baffin Bay, near Lancaster Sound, to the Nature Conservancy of Canada. This contribution will support the establishment of a national marine conservation area off the coast of Nunavut. The Nature Conservancy of Canada subsequently released the permits to the Government of Canada. A government moratorium on oil and gas activity has been in place for nearly 40 years in the Lancaster Sound and Baffin Bay regions and Shell had not conducted any exploration activities on these lands during that period.

Alternative / Green

  • The federal government’s 2016 budget provided $50 million over two years to support the development of clean technologies for Canada’s oil and gas sector. Natural Resources Minister Jim Carr announced this week that the government is seeking proposals to access the Oil and Gas Clean Tech Program. Projects selected under the fund will demonstrate industry-led clean technologies that, once commercialized, could be more widely adopted across the oil and gas industry to improve environmental performance and help reduce greenhouse gas emissions both domestically and globally.
Significant developments in Canadian energy – for the month of June 2016