Weekly OFS Newsletter
News Items Ending June 25, 2018
Mergers & Aquisitions
- Mullen Group Ltd. (TSX:MTL) announced the acquisition of Sherwood Park, AB based Canadian Hydrovac Ltd. (CHL), a hydrovac services provider to the midstream, pipeline, construction and municipal sectors in Western Canada. The acquisition increases Mullen’s hydrovac and specialized combo units and is expected to generate margin improvements through operational synergies. The acquisition is estimated to add $25 million in annual revenue to Mullen Group and will be financed through cash and the issuance of shares.
Keyera Corp. (TSX:KEY) closed its acquisition of a logistics and liquids blending terminal near Tulsa, OK. The transaction. The deal consideration includes a purchase price of $80 million and up to $10 million in additional consideration to be paid over five years. The acquisition is part of Keyera’s US investment strategy involving an expansion of its liquids infrastructure into key US liquid hubs.
- Horizon North Logistics Inc. (TSX:HNL) closed its previously announced bought deal financing of $50 million. The net proceeds from the offering will be used to reduce its committed credit facility balances, which will then be available to take advantage of potential new LNG projects in Western Canada and to expand its modular solutions business across Canada.
- Keyera Corp. (TSX:KEY) announced the issuance of $400 million of senior unsecured medium-term notes. The offering has a fixed coupon of 3.934% per annum paid semi-annually and will mature in June 2028. The net proceeds from the offering will be used to repay short term indebtedness and for general corporate purposes, including funding capital and operating expenditures, acquisitions and future growth opportunities.
The members of the Organization of Petroleum Exporting Countries (OPEC) agreed to a modest increase in oil production starting July 2018 after its leader Saudi Arabia persuaded Iran to cooperate amid calls from major consumers to help reduce prices and to avoid a supply shortage. Two OPEC sources claimed that OPEC and its allies including Russia should increase production by about one million bbls/d, or 1% of global supply.
Nexen Energy, a fully owned subsidiary of CNOOC Ltd. announced that it is proceeding with its $400 million Long Lake Southwest expansion project in northern Alberta. The project has been approved by the Alberta Energy Regulator and will add approximately 26,000 bbls/d of production from three well pads tied in to Nexen’s existing Long Lake oilsands facility. First oil is anticipated in late 2020.
Fort McMurray, AB based Syncrude Canada Ltd. announced that production will be offline at least through July after a site power outage. Syncrude has shut down the upgrader at the site with a production capacity of 360,000 bbls/d. The shutdown is expected to open up pipeline capacity in Western Canada during this period.