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

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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.