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Weekly OFS Newsletter

News Items Ending March 19, 2018


 

Mergers and Acquisitions

  • Gibson Energy Inc. (TSX:GEI) announced the sale of its US energy services businesses, including its US Environmental Services and its US seismic assets for approximately USD $96 million. The sale is consistent with Gibson’s objective of shifting towards being an oil infrastructure focused business. The proceeds from the sale will be reinvested into Gibson’s tankage and pipeline infrastructure projects currently under construction. 
  • Horizon North Logistics Inc. (TSX:HNL) announced the acquisition of Aldergrove, BC based Shelter Modular Inc., a full service modular construction company for $4.75 million. The acquisition will be paid for with a mixture of common shares and the assumption of existing debt, with the transaction scheduled to close in mid-April 2018. The acquisition provides Horizon North with additional manufacturing capacity to meet increasing demand in its Modular Solutions division.
  • Well Master Corp., a Colorado based company that engineers, manufactures and distributes plunger lift systems including proprietary technologies for optimized horizontal well production announced the acquisition of Grande Prairie, AB based T-RAM Canada Inc. T-RAM provides pipe optimization solutions in the Western Canadian oil and gas industry. The acquisition provides enhanced cross-selling opportunities for both entities in the US and Canada. Well Master will also be the exclusive global supplier and manufacturer of the patented Venturi and Venturi Viper Plungers upon the completion of the acquisition.

 

Financing

  • STEP Energy Services Ltd. (TSX:STEP) closed its bought deal equity financing, raising $56.31 million in gross proceeds. 6.06 million subscription receipts were issued at $9.30 each. The gross proceeds from the offering have been deposited in escrow pending the completion of STEP’s previously announced acquisition of Tucker Energy Services Holdings, Inc.

 

Other

  • The Alberta government is investing up to $500 million in royalty credits over four years beginning in 2020-2021 in conjunction with its Petrochemicals Diversification Program, which has been expanded to accommodate proposals that include using ethane, in addition to propane and methane. Some of the royalty credits will be used to help build new ethane processing facilities and the infrastructure to provide ethane. The province will also provide $500 million in loan guarantees and grants to create a Petrochemical Feedstock Infrastructure Program beginning in 2021-2022, spread over three years. This program is designed to encourage investment in facilities and infrastructure required to capture more natural gas liquids.
  • The US Federal Energy Regulatory Commission ruled that master limited partnerships (MLP) can no longer receive a tax credit for income taxes not paid. The decision came in response to an earlier court ruling finding the agency’s longstanding tax policy could result in double recovery of costs for MLPs. The policy change is expected to go into effect by late summer 2018 for natural gas pipelines and in 2020 for oil pipelines. 
 
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