Each one in plain English, with the numbers worked through for a shareholder.
14 May 2010joint venture update▲ GoodMajor
On 13 May 2010 Penn West agreed with a subsidiary of China Investment Corporation (CIC) to form a joint venture for its Peace River bitumen assets, valued at about $1.8 billion (about 237,000 net acres, about 2,700 boe/d). Penn West keeps 55% and operates; CIC takes 45% for $817 million, being $312 million at closing and $505 million applied to Penn West's future capital and operating costs. CIC also agreed to buy 23,524,209 new units (about 5% of units) at $18.48 for about $435 million, with closing expected about 1 June 2010. This is a new partner and new equity issue; existing unitholders are diluted by about 5% through the placement.
The March 2010 notes placement closed as US$250 million plus C$50 million, at an average term of 8.6 years and average rate of 5.5%; proceeds repaid part of the credit facility advances. Senior unsecured notes now total about $1.6 billion, roughly 60% of debt capital. The March distribution is confirmed at C$0.15 per unit, payable 15 April 2010 (record date 31 March). The 2009 annual documents were also filed, with a correction to the US GAAP ceiling test calculation for 2008 that revised US GAAP reconciliations only; no Canadian GAAP statements were amended. This resolves the March 2010 notes thread. The monthly distribution is down from C$0.34 in mid-2008 (inference from comparing stated figures).
On 1 March 2010 Penn West priced a private placement of senior unsecured notes of about US$300 million, with an average term of 8.6 years and an average rate of about 5.5%, expected to close about 16 March 2010. Proceeds are to repay bank facility advances. The notes rank equally with the bank facilities and other senior notes. The 5.5% average rate is below the ~8.9% average on the April 2009 placement (an inference from comparing the stated rates). This continues the pattern of swapping bank debt for long-term notes.
The Reece acquisition was completed on 30 April 2009 at 0.125 of a Penn West unit per Reece share, as announced in March. Former Reece holders are first eligible for the distribution payable about 15 May 2009 (record date 30 April), and Reece shares were to be delisted from the TSX Venture Exchange. This completes the deal announced on 10 March.
On 9 April 2009 Penn West priced about C$250 million of senior unsecured notes, mainly in the United States, with terms of five to ten years and an average rate of about 8.9%, expected to close about 5 May 2009. Proceeds are to repay part of the syndicated bank facility. The release lists earlier notes as US$955 million, C$30 million and £57 million. The rate is higher than the roughly 6% to 7% of the 2007-2008 placements, which is an inference from comparing the filings' stated rates.
On 10 March 2009 Penn West agreed to buy Reece Energy Exploration Corp. for 0.125 of a Penn West unit per Reece share (about 4.6 million new units), a total cost of about $92.2 million including Reece's debt. The release says it adds about 2,100 boe/d (67% light oil and liquids) and about 75,000 net undeveloped acres around Kindersley, Saskatchewan, next to Penn West's Dodsland oil play. Penn West says it will cut its 2009 capital programme by $40 million, the debt it expects to assume. Completion is expected in early May 2009, needing two-thirds Reece holder approval and regulatory approvals; a $2.5 million termination fee applies in certain conditions.
The Endev acquisition was completed on 22 July 2008, on the terms announced in May: 0.041 of a Penn West unit per Endev share. Former Endev holders are first eligible for the distribution payable about 15 August 2008 (record date 31 July) and Endev shares were to be delisted from the TSX. This completes the deal announced on 21 May.
On 16 July 2008 Penn West priced a further private placement of 6.95% notes due 2018, about C$114 million after cross-currency swaps, mainly in the United Kingdom, expected to close about 28 July 2008, with proceeds to repay part of the syndicated bank advances. The notes are unsecured and rank equally with the bank facilities and the May 2007 and May 2008 notes. The filing also confirms the July distribution of C$0.34 per unit, payable 15 August 2008 to holders of record on 31 July. This continues the pattern of replacing bank debt with long-term notes.
Penn West confirmed its subsidiary closed the notes placement priced on 30 April: US$480 million plus C$30 million (6.12% 2016, 6.30% 2018, C$ 6.16% 2018, 6.40% 2020). The notes are unsecured, rank equally with the bank facilities and the May 2007 US$475 million notes, and the proceeds repaid part of the bank debt. This resolves the open thread on the April 2008 notes.
On 21 May 2008 Penn West agreed to buy Endev Energy Inc. for 0.041 of a Penn West unit per Endev share (about 3.9 million new units), for a total cost of about $170 million including Endev's debt. The release says it adds about 3,500 boe/d (78% gas) and about 100,000 net undeveloped acres, mainly near Majorville in southeast Alberta; it needs two-thirds approval of Endev holders voting, plus regulatory approvals, with completion expected mid to late July 2008. A $5 million termination fee applies in certain conditions. This is a new acquisition following the Vault and Canetic deals.
1 May 2008capital raising announcement● NeutralMajor
On 30 April 2008 Penn West priced a private placement of notes: US$152.5m at 6.12% due 2016, US$278m at 6.30% due 2018, C$30m at 6.16% due 2018 and US$49.5m at 6.40% due 2020, expected to close about 29 May 2008. The notes are unsecured and rank equally with the bank facilities and the US$475m notes from May 2007; proceeds are to repay part of the syndicated bank facility advances. Treasury hedge contracts were settled for a gain of about US$2.4 million. This continues the 2007 pattern of replacing bank debt with long-term notes.
This business acquisition report says Penn West completed the Canetic Resources Trust acquisition on 11 January 2008. Canetic holders received 0.515 of a Penn West unit per unit (about 124.3 million units issued) plus a $0.09 per unit cash distribution (about $21.7 million), and Penn West assumed about $1.467 billion of Canetic bank debt plus convertible debentures. Concurrently Penn West put in place a $4 billion, three-year credit facility with 18 banks, used to retire its own bank debt and the debt assumed from Vault and Canetic. It acquired proved plus probable reserves of about 110.8 MMbbl light/medium oil and NGLs, 19.4 MMbbl heavy oil and 597.9 Bcf gas, and about 774,093 net undeveloped acres; the board gained four Canetic directors. This completes the Canetic merger agreed in October 2007 and greatly enlarges the trust and its debt.
The Vault acquisition closed on 10 January 2008, completing the deal announced in September 2007. Vault unitholders get 0.14 of a Penn West unit per Vault unit and warrant holders get $0.51 cash each, while Penn West takes on Vault's two convertible debenture series (now convertible into Penn West units) and must offer to repurchase them within 30 days. Former Vault holders are first eligible for the distribution payable around 15 February 2008.
Penn West filed the formal arrangement agreement, effective 30 October 2007, to merge with Canetic Resources Trust. It replaces an earlier original agreement between Penn West, its administrator and the two Canetic entities. The filing is the legal agreement; the excerpt shows conditions, a damages section and Canetic's $1.6 billion credit facility maturing 31 May 2009, but no exchange ratio or price. This is the first appearance of the Canetic deal in the story, and the exchange terms come only in the later closing report.
Penn West agreed on 25 September 2007 to buy Vault Energy Trust, exchanging 0.14 of a Penn West unit for each Vault unit (a 6% premium), with about 5.5 million new Penn West units issued and a total cost of about $380 million including Vault's debt. It is expected to add about 6,500 boe/d (65% gas, 35% light oil and NGLs) and about 120,000 net undeveloped acres; it still needs two-thirds approval of Vault holders plus court and regulatory approvals, with closing hoped for December 2007. A $10 million termination fee applies in certain conditions. This is a new acquisition, separate from the C1 Energy take-over that was finishing.
By 18 September 2007 more than 90% of the C1 Energy shares not already held by a Penn West subsidiary had been deposited, so Penn West intends to compulsorily acquire the rest at $0.20 per share. It plans to delist C1 from the TSX and end its reporting issuer status. This completes the C1 take-over that began in May, adding Peace River Arch assets near Penn West's oil sands project.
Penn West's subsidiary took up about 28.5 million C1 Energy shares, roughly 79.6% on a fully diluted basis, making its $0.20 cash offer unconditional and extending it to 3 August 2007. C1's board is replaced by Penn West-linked directors (Brussa, Smith, Allard and Brookman). This moves the May take-over bid toward completion.
1 June 2007capital raising announcement● NeutralMajor
On 31 May 2007 Penn West's subsidiary closed the US$475 million private placement of notes announced in April, using the proceeds to repay part of its bank debt. The same filing announced a cash take-over bid for C1 Energy Ltd. at $0.20 per share, about $23 million in total including assumed debt and working capital deficiency, for assets in the Peace River Arch area near Penn West's Peace River Oil Sands project.
Penn West closed an oil and gas property acquisition on 11 April 2007 (first announced 9 February 2007), funded from its existing syndicated bank facility and a new $250 million unsecured demand facility expiring 31 December 2008. It also priced US$475 million of unsecured private placement notes (US$160m at 5.68% due 2015, US$155m at 5.80% due 2017, US$140m at 5.90% due 2019, US$20m at 6.05% due 2022), with proceeds meant to repay some bank debt. The release does not give the acquisition price.
Unitholders of both Penn West and Petrofund approved the merger on 28 June 2006, subject to court and regulatory approvals; Petrofund holders get 0.6 of a Penn West unit per unit plus a $1.10 special distribution. The ExploreCo spin-off was dropped, so its assets stay in the merged trust, which the release says will have about 234 million units, roughly 135,000 boe/d of capacity and an enterprise value of about $11 billion. This confirms the vote outcome flagged two days earlier.
The Penn West and Petrofund merger was completed on 30 June 2006 after all court and regulatory approvals were received. Penn West describes the result as the largest energy trust in North America, with an enterprise value of about $11 billion and debt under one times annualized forecast cash flow. Petrofund units were to be delisted, and the ExploreCo spin-off was not done. This is the 2006 merger that the company's later history builds on, including its Peace River oil sands and CO2 recovery assets.
Penn West Energy Trust reported that about 88% of proxies favoured its planned merger with Petrofund Energy Trust, but about 70% were against the private placement of shares tied to the proposed ExploreCo spin-off company (and about 66% favoured the option plan). Because the arrangement made ExploreCo conditional on those approvals, the release says the ExploreCo parts would not go ahead while the merger itself could proceed if the two-thirds votes were met at the meetings.
