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Weekly OFS Newsletter

News Items Ending April 23, 2018


 

Financing

  • Calgary based private equity firm TriWest Capital Partners has invested in Calgary based HPC Energy Services Ltd., an oil and gas product and service company offering downhole tools, engineered power solutions and manufactured products to support drilling activity. The motivation behind the acquisition was HPC’s leading market position for its battery technology in the energy sector, as well as the opportunity to enter new markets going forward.
  • Divestco Inc. (TSXV:DVT) announced its intentions to enter into a financing arrangement for $3.15 million with a 30-month term at 15% per annum compounded monthly. Net proceeds from the loan will be used to repay a $3 million term loan. The majority of the loan will be held by directors and other insiders of Divestco. The loan ranks senior in priority to the majority of Divestco’s indebtedness.
  • Calgary based private equity firm Resource Merchant Capital provided convertible debenture financing to Nisku based Snubco Group Inc., a provider of pressure control services to the oil and gas industry. Snubco provides snubbing, well servicing, well control and freeze-hot tapping services to customers globally. The proceeds of the financing will be used to support Snubco’s growth initiatives, including the manufacture of a thermal heavy oil rod-stripping unit and for additional working capital to support a new international contract.

 

Other

  • The Alberta government introduced legislation that would give its energy minister power to restrict the flow of oil, gasoline and natural gas leaving the province. The Preserving Canada’s Economic Prosperity Act bill was introduced in response to the Trans Mountain expansion project dispute with the BC government. If passed, the Alberta energy minister would be able to direct truckers, pipeline companies and rail operators on how much product that can be shipped and when. Violators would face fines of up to $1 million a day for individuals and $10 million a day for corporations.
  • The Bank of Canada held interest rates steady at 1.25%. The bank concurrently trimmed its economic growth forecast for 2018 while hiking its outlook for 2019. It boosted its forecast for 2018 inflation but expects inflation to return to the 2% target for the rest of the projection horizon.
  • Canadian Pacific Railway Ltd. (TSX:CP) reached an agreement with its employee unions to postpone a strike that was scheduled for Saturday. The unions, which represent more than 3,300 employees or 25% of CP’s workforce are seeking a variety of changes, including predictable schedules to combat fatigue and the reduction of long working hours. The postponement decision was made upon the unions’ agreement with CP to order a vote on a final offer regarding CP’s renewal of its agreements with its unions.
  • Eastern Canada imports significant volumes of crude oil to meet its refining needs. In 2017, Newfoundland and Labrador imported ~60% of its crude oil from the US, down from 2015 when almost all its imports were from the US. New Brunswick has the most diverse crude slate, with 40% of crude imports from Saudi Arabia in 2017, followed by Azerbaijan, the UK, the US and Nigeria. Quebec receives over 60% of crude imports from the US, which have grown with the reversal of Line 9B. Ontario receives all its crude imports from the US, mainly Texas, North Dakota and Indiana.
  • Calgary based Gemini Corp. (TSXV:GKX), an integrated project construction company focusing on energy and industrial facilities in Western Canada was placed in receivership on April 19, 2018 by the Alberta Court of Queen’s Bench, on application by its senior secured creditor ATB Financial. FTI Consulting was appointed the receiver.
  • Schlumberger Ltd. (NYSE:SLB), the largest oilfield services company in the world said global oil supply and demand were in balance based on factors such as the absence of normal seasonal softness and the increase in geopolitical risks. Schlumberger also predicts investments in exploration and production to increase about 20% in North America and about 5% internationally.
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