Tag Archives: BMO Capital Markets

AltaGas to buy Semco Energy for $1.14 billion

CALGARY – (Source) AltaGas Ltd said Wednesday it has agreed to buy privately held Continental Energy Systems LLC’s Semco Energy Inc unit for $1.14 billion, adding natural-gas distribution and storage assets in Michigan and Alaska to its Canadian distribution and gas-processing businesses.

AltaGas said in a release that the purchase comes as it aims to expand into the northern United States, and will boost its earnings and cash flow by more than 10 percent.

In the deal, the company will acquire a Michigan gas-distribution business with 286,000 customers as well as a regulated storage facility with 4.9 billion cubic feet of capacity and a half share in 12.8 bcf unregulated storage facility.

It said it will also operate Alaska’s gas distributor with 132,000 residential customers and 11 bcf of gas storage currently under construction.

To help pay for the purchase, AltaGas will issue 12.1 million subscription receipts for C$29 each to raise gross proceeds of C$350 million ($350 million).

If demand warrants, the issue’s underwriters, a group led by BMO Capital Markets, RBC Capital Markets and TD Securities, have the option to buy a further 1.8 million receipts, boosting gross proceeds to C$403 million.

The proceeds will be held in escrow until regulators approve the acquisition.

AltaGas shares were halted on the Toronto Stock Exchange prior to the announcement. They were last up 10 Canadian cents at C$30.38.

Calgary Herald: AltaGas to buy Semco Energy for $1.14 billion

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Progress Energy buys Suncor natural gas assets in B.C. for $390MM

Progress Energy on Tuesday has acquired natural gas properties in northeastern British Columbia from Suncor Energy for $390 million and has stated they will follow up the acquisition with a $350 million capital program in 2010.

Michael Culbert, CEO of Progress Energy stated in a news release:

“The acquired assets represent a strategic fit with Progress’ existing land, reserves and production position in the Foothills of northeast British Columbia. We have long viewed these assets as high quality legacy properties with significant conventional and unconventional upside potential.”

The acquisition and a portion of the 2010 capital program will be funded through a $350-million private placement with the Canada Pension Plan Investment Board and a concurrent $250 million public financing through a syndicate of underwriters led by BMO Capital Markets.

The Globe & Mail: Suncor sells gas assets to Progress Energy

T. Boone Pickens Energy Fund files final prospectus in Canada

Canadian energy investors will soon have an investment option in Canada, as Texas billionaire and natural gas champion T. Boone Pickens files final prospectus for the T. Boone Pickens Energy Fund in all provinces and territories in Canada.

The Fund hopes top raise $200 million in an initial public offering and provide investors with the opportunity for long-term capital growth by providing access to the energy-related investment strategies of TBP Investments Management LLC (the “Portfolio Manager”). The Portfolio Manager and its management team are led by Mr. T. Boone Pickens. The Fund will seek to achieve its investment objective by investing the net proceeds of the offerings in an actively-managed portfolio consisting primarily of equity and commodity-related investments within the energy and energy-related sectors.

The offering is being made through a wide syndicate of investment dealers across Canada led by BMO Capital Markets and including CIBC, RBC Capital Markets, TD Securities Inc., Blackmont Capital Inc., Canaccord Financial Ltd., Desjardins Securities Inc., Dundee Securities Corporation, HSBC Securities (Canada) Inc., Raymond James Ltd., GMP Securities L.P., Manulife Securities Incorporated, Wellington West Capital Markets Inc. and Research Capital Corporation.

Canada Newswire (Press Release): T. Boone Pickens Energy Fund files final prospectus

Horn River basin still the best kept secret in natural gas

Back in June, Keith Kohl of Energy and Capital called the Horn River basin “The best-kept secret in natural gas discoveries”. In his latest article “How Canada is Suffering from Peak Natural Gas” he goes into detail about how Canada’s powerhouse energy province Alberta has been recording declining production in conventional gas since 2001 and that no amount of conventional drilling in Alberta is going to reverse this trend.

But despite the concerning decline of Alberta’s natural gas production, Mr. Kohl once again reminds his readers of the “best kept secret in natural gas”… British Columbia’s Horn River basin. In his October 13th article he states;

There’s but one province that has managed to increase natural gas production year after year: British Columbia. Back in 2000, BC made up just 12% of Canada’s overall production. Since then, that share has grown to over 18%.

The Horn River Basin isn’t news to us. In fact, I still believe this unconventional shale play is one of the best-kept secrets in natural gas discoveries. It’s a trend too costly to ignore.

Please don’t get me wrong: Alberta is will continue to be a powerhouse for Canadian energy. But I’ve found, more often than not, it’s worth it to stay ahead of the curve. Once BC gets a sufficient infrastructure in place (a few pipeline stocks come to mind), they’re going to give Alberta a run for their money.

Some forecasts predict that British Columbia will surpass Alberta in total natural gas production by 2020 – perhaps sooner. Analyst Michael Mazar of  BMO Capital Markets has stated; The Horn River Basin “has the potential to render those plays obsolete.” (See HRN: Will the Horn River Basin make Alberta the next “have-not” province?”)

Infrastructure is moving forward at a fast pace in BC and production estimates continue to grow. Fort Nelson is fast becoming the “next Fort McMurray” in Canada. Overall, Canada has a great opportunity to leverage increased domestic natural gas resources to lower carbon emissions by increasing the amount of natural gas used in the country’s overall energy mix.

Energy and Capital: “How Canada is Suffering from Peak Natural Gas” by Keith Kohl