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Weekly OFS Newsletter

News Items Ending February 5, 2018


 

Mergers and Acquisitions

  • Calgary based AGAT Laboratories acquired Trican Geological Solutions Ltd. (TGS) from Trican Well Services Ltd. (TSX:TCW). TGS specializes in enhanced rock mechanics scientific testing. The acquisition complements AGAT’s Rock Properties division by offering services supporting tight rock resource analysis and evaluation.
  • Gibson Energy Inc. (TSX:GEI) announced its corporate strategy to accelerate its transition to become a focused oil infrastructure growth company. The strategy includes divesting several of its non-core businesses, including NGL Wholesale, Canadian Truck Corp., Non-Core Canadian Environment Services and Non-Core US Injection Stations and Truck Transportation. Aggregate proceeds are expected to range between $275 and $375 million.
  • US private equity firm SCF Partners merged four of its portfolio companies to form Aberdeen, Scotland’s Centurion Group, a new global energy supply and infrastructure services business. The four companies include SITE Energy Services, a Calgary based provider of remote access, environmental and infrastructure services to construction and maintenance projects, and Waste Treatment Solutions, a Nanton, Alberta based integrated oilfield equipment supplier of combined sewage treatment, dual generator and lighting systems. Each company will continue operating under its existing brand name. Click here for additional details.
  • Vertex Resource Group Ltd. (TSXV:VTX) acquired Calgary based HMA Land Services, a professional land consulting company with a focus on large pipeline, utility and mineral land projects. The acquisition enhances Vertex’s core consulting services and provides Vertex with geographic exposure to new Canadian markets with projects and personnel on both the east and west cost of Canada.
  • Financing TerraVest Capital Inc. (TSX:TVK) is repurchasing 913,256 common shares, approximately 5% of all its issued and outstanding shares as at January 29, 2018. The Board of Directors of TerraVest authorized the bid with the belief that purchasing shares when the market price does not fully reflect the underlying share value is an efficient use of its financial resources.
  • Western Energy Services Corp. (TSX:WRG) announced it has drawn on its $215 million, 7.25% second lien senior secured term loan facility with Alberta Investment Management Corp. (AIMCo). The facility has a maturity of five years and were used along with cash on hands and existing credit facilities to fund the redemption of Western’s $265 million, 7.88% senior unsecured notes due in January 2019. Western expects to save $5.3 million annually in cash interest expense due to the decrease in debt levels and lower interest rate.

 

Other

  • The Energy Information Administration (EIA) announced that US crude oil production in November 2017 surpassed 10 million bbls/d for the first time since 1970, nearing the US all time output record. The gain was driven by increasing production from the shale basins in North Dakota, Texas, and the Gulf of Mexico.
  • The British Columbia government proposed a second phase of regulations to improve the preparedness, response and recovery from potential crude oil spills. The proposal restricts increases in bitumen shipments from Alberta to British Columbia until more studies are conducted. These regulations affect Kinder Morgan Canada Ltd.’s (TSX:KML) $7.4 billion Trans Mountain pipeline expansion from Alberta to the BC coast.
  • The Petroleum Services Association of Canada (PSAC) lowered its rig release forecast for 2018 from 7,900 to 7,600 wells, a decrease of 300 wells or four percent. PSAC is basing its updated 2018 forecast on average AECO natural gas prices of $1.75/mcf, crude oil (WTI) prices of USD $55/bbl and the Canada-US average exchange rate of $0.79.
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