Crescent Point acquires Spartan Delta assets in $1.7bn cash deal

BY Fraser Tennant

Despite current volatility in oil prices, oil and gas company Crescent Point Energy Corp. is to acquire the oil and liquids-rich Montney assets in Alberta of fellow energy company Spartan Delta Corp. in a deal valued at $1.7bn.

Under the terms of the definitive agreement, Spartan shareholders are expected to receive $9.50 per common share through the deal with Crescent Point, which is the second sizeable acquisition among Canadian explorers and producers this year after 2022 saw a drop in deals due to volatile oil prices.

The all-cash deal will see Calgary-based Crescent Point acquire 600 drilling locations in the Montney region, adding 38,000 barrels of oil equivalent per day to the company's production inventory.

The transaction also significantly grows Crescent Point’s presence in what is one of North America's largest unconventional petroleum resources, and immediately boosts excess cash flow per share by 20 percent.

“Over the past five years, we have fundamentally rebuilt and strengthened Crescent Point,” said Craig Bryksa, president and chief executive of Crescent Point. “As a result of our efforts, and after closing this transaction, our asset base will include significant inventory depth in both the Kaybob Duvernay and the Montney, while also maintaining significant low-decline assets in Saskatchewan that provide additional excess cash flow.”

Following the sale, Spartan intends to develop its remaining Alberta Deep Basin assets and spin off a portion of its remaining production to build a new growth-focused Montney junior company called Logan Energy Corp. with assets in Alberta and British Columbia.

“This transaction sees the successful conclusion of our strategic repositioning process with our core Montney development asset sale, the creation of a new growth-focused Montney junior company and the retention of our sustainable Free Funds Flow and dividend generating assets in the Deep Basin,” said Fotis Kalantzis, president and chief executive of Spartan. “I thank our shareholders, employees, board, stakeholders, and other supporters who helped cultivate this successful outcome.”

The transaction is anticipated to close during second quarter 2023, subject to regulatory approvals and customary closing conditions.

Mr Bryska concluded: “The Montney acquisition is immediately accretive to our per share metrics, enhances our return of capital to shareholders and is aligned with our long-term strategy to focus on high quality, scalable resource plays that meet our defined asset criteria.”

News: Crescent Point Energy to buy Spartan Delta's Montney assets for $1.2 bln

Origin Energy acquired for $10.21bn

BY Richard Summerfield

A consortium comprising Brookfield Renewable Partners, GIC, Temasek and MidOcean Energy, a liquefied natural gas (LNG) company formed and managed by EIG, has agreed to acquire Australian integrated electricity generator, and electricity and natural gas retailer Origin Energy in a deal worth $10.21bn.

The terms of the deal will value Origin at an enterprise value of $18.7bn. The purchase price of $8.91 per share represents a 53.4 percent premium to the company’s unaffected share price.

Upon closing of the transaction, Brookfield, its institutional partners and investors will own Origin’s energy markets business, Australia’s largest integrated power generator and energy retailer. MidOcean will separately own Origin’s integrated gas business including its upstream gas interests and a 27.5 percent stake in Australia Pacific LNG (APLNG). MidOcean has entered into an agreement to on-sell a 2.49 percent interest in APLNG to ConocoPhillips. ConocoPhillips, already a 47.5 percent owner in APLNG, is the current downstream operator and intends to take over upstream operatorship of APLNG.

The deal is subject to approval from Origin’s shareholders, regulatory approvals and an independent expert’s report into whether the offer is in best interest of the shareholders, among others.

“The Board is unanimous in its view that this transaction is in the best interests of shareholders,” said Scott Perkins, chairman of Origin. “The transaction represents a significant premium to the share price prior to the original indicative proposal, and reflects the strategic nature of Origin’s platform, its growth prospects and anticipated earnings recovery. We believe the Consortium will be responsible owners of Origin’s businesses. Our discussions with the Consortium confirm a high degree of alignment with Origin’s strategy and a desire to accelerate initiatives consistent with Origin’s critical role in Australia’s energy transition. This alignment validates the vision and hard work of Origin’s management team and employees.”

“The significant premium placed on Origin by the Consortium reflects the value of our strategy and our advantaged position to capture value from the energy transition,” said Frank Calabria, chief executive of Origin. “We believe this transaction is a great outcome not only for our shareholders, but for all stakeholders including our customers, employees and partners. We believe this transaction also stands to benefit the broader Australian community as it will unlock significant capital that can help accelerate the energy transition and deliver benefits in the form of cleaner, smarter and lower cost energy for our nation over time.”

“As the energy transition gathers pace, what’s needed is increasingly clear: faster deployment of large-scale renewables, the accelerated, responsible retirement of coal generation, and an interim, supportive role for gas as the dependable back-up fuel,” said Mark Carney, chair of Brookfield Asset Management and head of transition investing. “Brookfield is determined that the new Origin Energy Markets will lead the way in all respects at this critical moment for the Australian economy.”

“LNG will be critical in delivering energy transition targets, and this transaction is a compelling opportunity to accelerate EIG’s strategy of gaining exposure to high quality LNG assets around the globe,” said Blair Thomas, chief executive of EIG. “We have long been attracted to the Australian market, with an established presence in Australia since 2000, and look forward to playing a pivotal role in meeting Australia’s transition targets by enabling broader decarbonization efforts at APLNG.”

News: Origin Energy agrees $10.2 bln takeover deal with Brookfield consortium

Mountain Express files for Chapter 11 bankruptcy protection

BY Richard Summerfield

Mountain Express Oil Company and certain other affiliated companies have filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of Texas.

According to the company’s court filing, Mountain Express’ retail network will continue normal operations. The company will use cash collateral to fund and protect its operations if the court rules in its favour, alongside normalising operating cash flows to reach “value-maximising”.

Mountain Express has also confirmed in a press release, that it was in advanced discussions with its secured lenders regarding a commitment of debtor-in-possession financing, which will provide additional liquidity to the company and assure its ability to meet its post-petition obligations in the ordinary course of business. Mountain Express will continue discussions with its financial stakeholders, including critical conversations with its landlords and other key constituents to maximise value for all stakeholders.

“Through this process, Mountain Express will continue to transform the business for the future while bolstering our financial position,” said Turjo Wadud, chief executive of Mountain Express. “I am confident in the strength of our business and our team and look forward to achieving a comprehensive resolution that will best position Mountain Express for long-term success. We continue to have a robust pipeline and will continue to provide opportunities for our dealers, partners, and employees. During this process, we intend to maintain the underlying durability of our business as well as our strong relationships in the industry.”

Mountain Express, which was founded in 2000, currently operates a network consisting of 828 fuelling sites and 27 travel centres throughout 27 states in the US. Its associations include partnerships with major firms such as ExxonMobil, BP, Shell, Chevron, Texaco and Sunoco. The company also has a dealer joint venture with Pilot Co., Knoxville, Tennessee Since 2013, Mountain Express has distributed more than 1.1 billion gallons of fuel, it said.

In 2021, Mountain Express completed a $205m debt financing, which the company said it will use to refinance its existing credit facilities and to support its growth objectives. Later in the year it acquired Brothers Food Mart in New Orleans, which had 50 locations. It also acquired 24 retail locations and the wholesale fuel assets of Texon Oil Inc. in Medford, New Jersey. And in 2022, Mountain Express purchased the 26-unit The Store brand of convenience stores from Team Schierl Cos.

News: Mountain Express Oil to Restructure Following Chapter 11 Filing

STB approves $31bn railways acquisition

BY Fraser Tennant

Giving the green light to the first major railroad merger in 20 years, the US Surface Transportation Board (STB) has approved the $31bn merger of Canadian Pacific (CP) and Kansas City Southern (KCS).

The STB’s decision is effective as of 14 April 2023, at or after which point the two railways combine to create the new CPKC – the first single-line railway connecting the US, Mexico and Canada.

Among the core conclusions reached by the STB regarding the public and pro-competitive benefits of the CP-KCS combination are that the combination should ultimately enhance safety and benefit the environment.

The regulator also stated that the transaction will make possible improved single-line service for many shippers and will result in merger synergies that are likely to allow CPKC to be a vigorous competitor to other Class I carriers by providing improved service at lower cost.

“The STB’s decision clearly recognises the many benefits of this historic combination,” said Keith Creel, president and chief executive of CP. “As the regulator found, it will stimulate new competition, create jobs, lead to new investment in our rail network and drive economic growth.

“These benefits are unparalleled for our employees, rail customers, communities and the North American economy at a time when the supply chains of these three great nations have never needed it more,” he continued. “A combined CPKC will connect North America through a unique rail network able to enhance competition, provide improved reliable rail service, take trucks off public roads and improve rail safety by expanding CP’s industry-leading safety practices.”

Headquartered in Calgary, Canada, CPKC will operate approximately 20,000 miles of rail, employing close to 20,000 people. Once combined, full integration of CP and KCS is expected to happen over the next three years, unlocking the benefits of the combination.

“This important milestone is the catalyst for realising the benefits of a North American railroad for all of our stakeholders,” said Patrick J. Ottensmeyer, president and chief executive of KCS. “The KCS board of directors and management team are very proud of the many contributions and achievements of the people who have made KCS what it is today.”

Mr Ottensmeyer concluded: “We are excited for the boundless possibilities as we move forward into the next chapter as CPKC.”

News: US regulator approves Canadian Pacific purchase of Kansas City Southern

Blackstone acquires Cvent in $4.6bn transaction

BY Fraser Tennant

In a transaction which takes the company private, event-software provider Cvent Holding Corp. is to be acquired by Blackstone for approximately $4.6bn.

Under the terms of the definitive agreement, Cvent stockholders will receive $8.50 per share in cash, representing a premium of 52 percent to the volume weighted average share price over the 90 days prior to 30 January 2023 – the day before media reports of a potential transaction were published.

Upon completion of the transaction – which involves Blackstone receiving a fully committed $1bn credit facility as part of its financing – Cvent’s common stock will no longer be publicly listed, and Cvent will become a privately held company.

Founded in 1999, Cvent’s comprehensive suite of technology solutions powers the entire event management process to maximise the impact of events. The company has approximately 22,000 customers globally in the corporate, non-profit, higher education and hospitality sectors.

“The continued events and travel recovery is one of Blackstone’s highest-conviction investment themes,” said David Schwartz, a senior managing director at Blackstone. “Given our extensive experience in the hospitality, events and real estate sectors, we believe Blackstone is well-positioned as a growth partner for this exceptional business.”

Following the recommendation of a special committee composed entirely of independent and disinterested directors, the Cvent board of directors unanimously approved the merger agreement.

“We are excited to share this announcement and look forward to our next chapter alongside the Blackstone team,” said Reggie Aggarwal, founder and chief executive of Cvent. “As one of the world’s largest private equity firms, Blackstone brings deep expertise in the event and hospitality industry, and with their backing, we plan to continue to invest in our business and deliver the innovative solutions that meet our customers’ needs and power the meetings and events ecosystem.”

The transaction is expected to close mid-year 2023, subject to the satisfaction of customary closing conditions, including receipt of approval by Cvent’s stockholders and required regulatory approvals.

Martin Brand, head of North America private equity and global co-head of technology investing at Blackstone, concluded: “Cvent is an industry leader, and we are excited to partner with their management team to continue the firm’s innovation and deliver world-class technology solutions to customers in the event and hospitality space.”

News: Events software provider Cvent accepts Blackstone's $4.6 bln deal