Canada: Significant Developments In Canadian Energy – For The Month Of January 2016

Last Updated: March 3 2016
Article by Erik Arnold and Daniel Lo

Conventional

  • January 6, 2016 – Perisson Petroleum Corporation, which currently operates only in Colombia, announced that it has entered into a long-term relationship with a new strategic investor group that wants to fund Canadian acquisitions. The new strategic investor group is proposing to finance an aggressive oil and gas asset acquisition strategy after undertaking an initial non-brokered private placement for gross proceeds of up to $40 million at a subscription price of 40 cents per share. Accretive strategic plays in Canada are anticipated to occur starting in the first half of 2016, totalling approximately $150 million over 18 months.
  • January 8, 2016 – The National Energy Board has approved, subject to federal cabinet approval, LNG Canada Development Inc.'s application for a 40-year natural gas export licence with a maximum of 1,494 billion cubic metres (52,729 bcf) over the term of the licence. The maximum annual export quantity would be 38.06 billion cubic metres or 1,344 bcf of natural gas. The licence is the first 40-year natural gas export licence approved by the NEB since an amendment to the National Energy Board Act and corresponding regulations in June 2015. In 2013, LNG Canada received approval for a 25-year LNG export licence but went back to the board to ask it to consider an application for a term not to exceed 40 years, in accordance with the legislative amendment.
  • January 12, 2016 – Enerplus Corporation has divested assets, which are largely located around the Ansell, Minehead and Hanlan-Robb areas, for $193 million, consisting of operated and non-operated properties and facilities. Production from these properties for 2016 was expected to be roughly 5,400 boe per day, 98 per cent natural gas. These properties are being divested under two separate transactions, both of which are expected to close during the first quarter of 2016.
  • January 15, 2016 – The National Energy Board approved another two LNG export licences. AltaGas DCLNG General Partner Inc. received its approval after applying to the board in June 2015, and the board also approved the export application of NewTimes Energy Ltd., which applied nearly a year ago.

Unconventional

  • January 18, 2016 – Suncor Energy Inc. and Canadian Oil Sands Limited have reached an agreement to support the offer by Suncor to purchase all of the shares of COS. The two companies sparred publicly for months about Suncor's original bid. Under the terms of the "support agreement" Suncor has agreed to amend its offer to provide for an increase in the original offer to COS shareholders to 0.28 of a Suncor share for each COS share. The amended offer, with a total aggregate transaction value of roughly $6.6 billion including COS's estimated debt of $2.4 billion, has the support of the boards of directors of both companies.

Midstream

  • January 4, 2016 – Tidewater Midstream and Infrastructure Ltd. has closed an acquisition agreement for a 100 per cent working interests in three deep cut gas processing/natural gas liquids extraction facilities with total aggregate capacity of 142 mmcf per day of gas processing/NGL extraction capability, plus a 100 per cent working interest in approximately 250 kilometres of related pipeline networks and infrastructure, including land and rail access at Fort Saskatchewan. Consideration was for a nominal amount of cash, however the replacement value of the assets has been estimated at approximately $200 million.
  • January 7, 2016 – TransCanada Corporation sued the U.S government to reverse President Barack Obama's rejection of its permit to build Keystone XL pipeline. TransCanada's lawsuit in a federal court in Houston such rejection unconstitutional. The lawsuit does not seek monetary damages but rather seeks to have the permit denial invalidated, along with a ruling that no future president can block construction. In a separate action under the North American Free Trade Agreement, the company said the pipeline permit denial was "arbitrary and unjustified" and seeks $15 billion in damages, to recover its investment in the pipeline.
  • January 7, 2016 – Pembina Pipeline Corporation says it has entered into an agreement with a syndicate of underwriters co-led by Scotiabank, BMO Capital Markets and RBC Capital Markets. Under the deal, the underwriters have agreed to purchase from Pembina six million cumulative redeemable minimum rate reset class A preferred shares, Series 11 at a price of $25 per share for distribution to the public.
  • January 14, 2016 – The British Columbia Supreme Court ruled that Enbridge Inc. must apply to the province for an environmental assessment certificate for the Northern Gateway project. The court also ruled that the province is required to consult with the Gitga'at First Nation about the potential impacts of the project on areas of provincial jurisdiction and about how these impacts may affect Aboriginal rights.
  • January 27, 2016 – Prime Minister Justin Trudeau pledged to require that federal environmental reviews of oil pipelines and LNG export projects consider greenhouse gas effects. The Liberal government said the new rules would be rolled out within days, and that they would take into account not just the greenhouse gas emissions from a proposed pipeline or LNG terminal but also its upstream effects.

Off-Shore

  • January 21, 2016 – Woodside Petroleum Corporation in Nova Scotia announced that processing of the Tangiers 3D marine seismic survey (over 7,000 square kilometres) was nearing completion at the end of Q4 2015. Delivery of data is expected in January 2016.
  • January 22, 2016 – Schlumberger completed the first year of an integrated services contract for Statoil offshore Newfoundland. The exploration and appraisal of the Flemish Pass Basin used a combination of Schlumberger technologies that improved drilling efficiency, assured wellbore integrity, and optimized placement of a well in a water depth of 2,829 metres. In another project offshore Atlantic Canada, Schlumberger deployed a combination of technologies for Statoil in the formation evaluation and reservoir characterization of the deepwater well at Bay du Nord.

Alternative / Green

  • January 8, 2016 – The premiers of Alberta and Manitoba announced a partnership on renewable energy. "Alberta and Manitoba will support each other in our goals on creating greener economies based on good jobs and sustainability," Manitoba Premier Greg Selinger said. Last month, Selinger promised to cut greenhouse gas emissions by one-third in the next 15 years and bring in a cap-and-trade system for the province's 20 largest emitters to help meet that goal. The Manitoba government also promised to create 6,000 green jobs in the next five years, expand its Power Smart program to help people reduce energy use and bring in an environmental bill of rights with an independent watchdog. In Alberta, Premier Rachel Notley last month introduced a sweeping new climate change strategy, including a plan to cap oilsands emissions at 100 megatonnes and charge a $30-a-tonne carbon tax by 2018.
  • January 14, 2016 – Beothuk Energy has proposed a new 1GW wind farm built 20km off the Nova Scotia coast. The electricity generated by the offshore project would be exported to the United States via the Can-Am link, a proposed undersea transmission cable which would make landfall near Boston, Massachusetts. To facilitate construction of the $4 billion wind farm and export of the generated energy to New England, Beothuk Energy will be working in concert with leaders in finance, construction, and offshore wind energy, including Jacob Capital Management, Siemens Offshore Wind, Talon Energy and Maderra Engineering.
  • January 26, 2016 – Nova Scotia Power says it has exceeded the provincial target of generating 25 per cent of electricity from renewable energy sources in 2015. The province now generates 26.6 per cent of its electricity from sources such as wind, hydro, tidal and biomass. The most rapid growth has come from wind farms, which jumped from supplying 1 per cent to 10 per cent of the province's electricity.

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