Calgary-based Shiningbank Energy Income Fund (Toronto: SHN.U) has canceled its acquisition of Rider Resources Ltd., Calgary, (Toronto: RRZ) in a deal valued at C$420 million in stock and assumed debt.
The companies reported that the Canadian government has not provided guidance on the new tax regime governing income trusts and a possible retroactive application. The all-stock deal was affected by a general-market sell-down in Canadian trust stocks after a change in policy on taxing trusts was announced November 1.
Rider's properties are concentrated in the Pembina, Sunchild and Ferrier areas of Alberta, involving net undeveloped land of approximately 17,500 acres. Production is approximately 8,800 BOE per day (78% gas) and proved-plus-probable reserves total 24.8 million BOE (77% gas). Approximately 61% of the reserves are proved (86% developed and producing).
CIBC World Markets Inc. was financial advisor to Shiningbank. FirstEnergy Capital Corp. and Scotia Waterous were financial advisors to Rider.
Rider shareholders were to receive 0.4659 Shiningbank trust unit per Rider share and pro-rata ownership in a separate exploration company run by Rider's managers. The stock portion of the deal was valued at C$328 million at the time it was announced. Shiningbank was to assume C$92 million in debt.
The acquisition was to increase Shiningbank's production to approximately 35,000 BOE per day.
Meanwhile, Jed Oil Inc., Calgary, (Amex: JDO) has canceled its proposed acquisition of JMG Exploration Inc., Calgary, (NYSE: JMG) for two Jed shares per three JMG shares in a deal that was originally valued at approximately C$10 million.
JMG chief executive Joe Skeehan cited material changes to both companies and general market conditions since the February 2006 agreement, and "the transaction no longer makes sense from a financial point of view for the JMG shareholders."
JMG has acreage in North Dakota and Wyoming, producing 88 BOE per day.
A deal that has closed since the November 1 tax news is the Pengrowth Energy Trust, Calgary, (Toronto: PGF-UN; NYSE: PGH) purchase of Burlington Resources Ltd. assets in Canada from ConocoPhillips, Houston, (NYSE: COP) for C$1 billion in cash.
The properties involve more than 375,000 net acres of undeveloped land, production of some 21,625 BOE per day (52% gas) and proved reserves of 51.4 million BOE (88% producing).
Pengrowth's production has increased 27% to approximately 100,000 BOE per day, and proved-plus-probable reserves now total some 360 million BOE.
Pengrowth plans to divest assets producing approximately 7,700 BOE per day with proved-plus-probable reserves of 25 million BOE. The assets to be sold are in noncore areas or have higher operating costs or a shorter reserve life. Total proceeds are expected to be approximately C$300- to C$400 million.
The deal was funded by senior bank debt underwritten by Royal Bank of Canada.
RBC Capital Markets and Scotia Waterous were financial advisors to Pengrowth. Tristone Capital Inc. was advisor to ConocoPhillips.
The companies reported that the Canadian government has not provided guidance on the new tax regime governing income trusts and a possible retroactive application. The all-stock deal was affected by a general-market sell-down in Canadian trust stocks after a change in policy on taxing trusts was announced November 1.
Rider's properties are concentrated in the Pembina, Sunchild and Ferrier areas of Alberta, involving net undeveloped land of approximately 17,500 acres. Production is approximately 8,800 BOE per day (78% gas) and proved-plus-probable reserves total 24.8 million BOE (77% gas). Approximately 61% of the reserves are proved (86% developed and producing).
CIBC World Markets Inc. was financial advisor to Shiningbank. FirstEnergy Capital Corp. and Scotia Waterous were financial advisors to Rider.
Rider shareholders were to receive 0.4659 Shiningbank trust unit per Rider share and pro-rata ownership in a separate exploration company run by Rider's managers. The stock portion of the deal was valued at C$328 million at the time it was announced. Shiningbank was to assume C$92 million in debt.
The acquisition was to increase Shiningbank's production to approximately 35,000 BOE per day.
Meanwhile, Jed Oil Inc., Calgary, (Amex: JDO) has canceled its proposed acquisition of JMG Exploration Inc., Calgary, (NYSE: JMG) for two Jed shares per three JMG shares in a deal that was originally valued at approximately C$10 million.
JMG chief executive Joe Skeehan cited material changes to both companies and general market conditions since the February 2006 agreement, and "the transaction no longer makes sense from a financial point of view for the JMG shareholders."
JMG has acreage in North Dakota and Wyoming, producing 88 BOE per day.
A deal that has closed since the November 1 tax news is the Pengrowth Energy Trust, Calgary, (Toronto: PGF-UN; NYSE: PGH) purchase of Burlington Resources Ltd. assets in Canada from ConocoPhillips, Houston, (NYSE: COP) for C$1 billion in cash.
The properties involve more than 375,000 net acres of undeveloped land, production of some 21,625 BOE per day (52% gas) and proved reserves of 51.4 million BOE (88% producing).
Pengrowth's production has increased 27% to approximately 100,000 BOE per day, and proved-plus-probable reserves now total some 360 million BOE.
Pengrowth plans to divest assets producing approximately 7,700 BOE per day with proved-plus-probable reserves of 25 million BOE. The assets to be sold are in noncore areas or have higher operating costs or a shorter reserve life. Total proceeds are expected to be approximately C$300- to C$400 million.
The deal was funded by senior bank debt underwritten by Royal Bank of Canada.
RBC Capital Markets and Scotia Waterous were financial advisors to Pengrowth. Tristone Capital Inc. was advisor to ConocoPhillips.
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