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Weekly OFS Newsletter

News Items Ending March 26, 2018


 

Mergers and Acquisitions

  • Calgary based Specialized Desanders Inc. (SDI), a provider of high pressure sand recovery services to oil and gas well operators in Canada announced a private placement. The transaction involves a partnership between Morgan Stanley Energy Partners and SDI’s existing management team to support the growth of SDI’s innovative oilfield equipment and services. The transaction also provides liquidity for private investor Hammond, Kennedy, Whitney & Company Inc.

 

Financing

  • Pembina Pipeline Corp. (TSX:PPL) is issuing $700 million of senior unsecured medium term notes, with the offering to be conducted in two tranches. The first tranche will be for $400 million with a fixed coupon of 4.02% per annum, paid semi-annually and maturing in 2028. The second tranche will be for $300 million with a fixed coupon of 4.75% per annum, paid semi-annually and maturing in 2048. The net proceeds will be used to repay short term debt, fund Pembina’s capital expenditures and for general corporate purposes.

 

Other

  • The Alberta government announced its 2018 budget last week, with an $8.8 billion deficit forecasted for 2018 and a five-year plan to balance the books. The forecasted debt load for 2018 is $54.2 billion and is expected to reach $96 billion by 2024. Interest payments on debt is $1.9 billion this year, which is more than all royalty payments expected from bitumen. The budget predicts oil prices will be USD $59 per barrel in 2018-2019, USD $60 in 2019-2020 and USD $63 in 2020-2021.
  • The BC Government announced a number of tax breaks designed to help smooth the way for the $40 billion LNG Canada project. The announcement outlined a series of steps designed to improve the economics of the project, which will be located near Kitimat, BC. The project includes the construction of a natural gas pipeline by TransCanada Corp. (TSX:TRP) from the Montney region and other northeast BC natural gas producing areas to Kitimat. The project is the survivor among 20 LNG projects first proposed for BC in the past decade and a final investment decision will be made later this year.
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