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

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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.