PROVIDENT ENERGY LTD

Pembina completed its acquisition of all Provident common shares on April 2, 2012, in a transaction valued at approximately $3.8 billion; Provident shareholders received 0.425 of a Pembina share per Provident share, as agreed in January. Provident was amalgamated with a wholly-owned Pembina subsidiary and continued as Pembina NGL Corporation, and its shares have been delisted from the NYSE (TSX delisting expected concurrently with the Pembina share listing). Pembina assumed the 5.75% debentures due 2017 and 2018 and will make a repurchase offer at 100% of principal plus accrued interest within 30 days; holders who decline keep the original maturity. Pembina's monthly dividend rises from $0.13 to $0.135 per share, payable May 15, 2012 to holders of record April 25, 2012. Pembina plans a new 65,000 bpd Redwater fractionator in service by mid 2014, subject to customer support and approvals.

business combination

Pembina and Provident said the Competition Bureau of Canada has cleared Pembina's proposed acquisition of Provident; clearance under the Canada Transportation Act was received earlier. These satisfy two of the closing conditions. Still needed are the 66 2/3% Provident shareholder vote, a Pembina shareholder vote, Court of Queen's Bench of Alberta approval and other regulatory approvals; special meetings are set for March 27, 2012 and completion is expected on or about April 2, 2012.

business combination

Pembina Pipeline agreed on January 16, 2012 to acquire all Provident common shares by plan of arrangement, with Provident shareholders receiving 0.425 of a Pembina share per Provident share. Pembina says this is a 24.7% premium to Provident's January 13 close of $9.51, and a 27.5% increase in monthly dividends per share after the exchange ratio. Pembina will assume Provident's 5.75% convertible debentures due 2017 and 2018 (conversion prices adjusted) and plans to offer to repurchase them at par within 30 days of closing; Provident suspends its dividend reinvestment plans. Closing needs at least 66 2/3% of votes at a Provident special meeting, a Pembina shareholder vote, court, Competition Act and TSX approvals; boards and directors/officers support it. This ends Provident's independent path, but the deal is only pending, so shareholders' treatment is not yet final.

business combination

Provident completed its conversion from an income trust to a dividend-paying corporation, Provident Energy Ltd., on January 1, 2011. Each trust unit was exchanged for one common share; the shares trade as PVE (TSX) and PVX (NYSE) and the trust units are delisted. Debenture holders can convert into common shares on the same terms as before. This completes the conversion thread begun in October 2010; shareholders keep their position in share form.

dividend declaration

Provident agreed a bought-deal sale of $150 million of 5.75% convertible subordinated debentures due December 31, 2017, convertible at $10.60 per unit, with a $22.5 million over-allotment option. Proceeds will first repay bank debt, which can then be redrawn to buy back tendered 6.5% debentures or repay those maturing; the filing also refers to a reorganization into a dividend-paying corporation targeted for about January 1, 2011, announced October 6, 2010, subject to unitholder, court and regulatory approvals. The conversion plan is a new thread; the debt raise relates to the 6.5% debentures already in the context.

capital raising announcement

Provident completed the Pace arrangement: unitholders approved it on June 28, 2010 (about 97% of units voted in favour), and Provident received $120 million cash to reduce bank debt, with about 32.5 million Pace shares issued directly to unitholders (0.12225 Pace share per unit, record date July 9, 2010). This resolves the Pace/Midnight vote thread; Provident units stay listed and Provident describes itself as a pure-play NGL midstream business. It also signed a new $500 million revolving credit facility (expandable to $750 million, plus a $60 million letter of credit facility, expiring July 1, 2013, about $235 million expected drawn), adjusted conversion prices on its 6.5% C and D debentures (to $11.56 and $12.40), and said CFO Mark Walker will step down once a replacement is named, expected by September 30, 2010.

debt financing

Provident and Midnight Oil Exploration issued a joint circular for a plan of arrangement in which Midnight acquires Provident's oil and gas production business for about $460 million in cash and shares. Provident unitholders would receive 0.12225 Midnight shares (post 10-for-1 consolidation) per unit and, with Midnight shareholders, would own about 81% and 19% respectively of the combined Pace Oil & Gas Ltd. Provident keeps about $120 million in cash (net of costs) to repay its credit facility, unitholders keep their Provident units, and Provident continues in NGL midstream. Votes by two-thirds of each side are needed at meetings on June 28, 2010; the board unanimously recommends approval. The circular is signed by Douglas Haughey as President and CEO of Provident Energy Ltd., the administrator, whereas the earlier context named Tom Buchanan in that role. The filing does not explain the change.

business combination

Provident completed the purchase of the Corunna, Ontario (Sarnia area) hydrocarbon storage facility from Dow Chemical Canada for an undisclosed amount, as announced in November 2009. It plans to use it for operational and commercial storage, with about $17 million in 2010 capital for rail and truck-loading upgrades expected to be finished in the second half of 2010.

business combination

Provident completed the sale of its West Central Alberta assets to Storm Ventures for $190 million cash, which became $177 million after closing adjustments. Proceeds go to the revolving term credit facility. This completes the sale announced in December 2009.

asset acquisition disposition

Provident agreed to sell its West Central Alberta oil and gas assets to private company Storm Ventures International for $190 million cash before closing adjustments, with closing expected in Q1 2010 and an October 1, 2009 effective date. The assets produce about 5,000 boe/d (roughly 70% gas); proceeds will reduce the revolving credit facility. The company says its 2010 capital budget of $142 million is unchanged, with about $55 million for Upstream, and describes this as another step in the divestiture program that included Lloydminster and Southern Saskatchewan.

asset acquisition disposition

Provident completed the sale of its Lloydminster-area assets to Emerge Oil & Gas for $85 million including closing adjustments ($68 million cash, $17 million equity), slightly below the $87 million announced. After applying the cash, about $285 million will be drawn on its revolving term credit facility (down from about $350 million after the Saskatchewan sale). This completes the Lloydminster sale thread.

asset acquisition disposition

Provident agreed to buy a commercial storage facility in the Sarnia area from Dow Chemical Canada for an undisclosed amount, with closing expected in early 2010. The site has 12.1 million barrels of active cavern capacity (5.0 million for hydrocarbons, 7.1 million currently used for brine) and Provident says it expands its Commercial Services platform into Eastern Canada. Its 2010 capital budget includes about $17 million for upgrades such as rail expansion and a truck terminal. This adds to the Sarnia midstream operations already in the context.

business combination

Provident agreed to sell its Lloydminster-area oil and gas assets to private company Emerge Oil & Gas Inc. for $87 million ($70 million cash and $17 million in equity), with closing expected by November 30, 2009. The assets produced 2,200 boe/d in Q3 2009; cash proceeds go to the revolving term credit facility. This resolves the Lloydminster sale process (Scotia Waterous advisor) in the context, and is part of the August 2009 plan to divest non-strategic Saskatchewan and Lloydminster-area assets.

asset acquisition disposition

Provident closed the Saskatchewan asset sale for $226 million including closing adjustments, and separately sold a minor Lloydminster-area property (Dolcy, about 350 boe/d) for $13 million; proceeds go to the revolving term credit facility. The term facility is expected to be cut by $75 million to $1,050 million from October 1, 2009, with about $350 million drawn after the proceeds. The sale of the remaining Lloydminster heavy oil assets continues, with non-binding proposals expected in late October 2009 and Scotia Waterous as advisor.

asset acquisition disposition

Provident agreed to sell its Southeast and Southwest Saskatchewan oil and gas assets to Crescent Point Energy for $225 million cash before adjustments, with closing scheduled for September 30, 2009. The assets produced about 3,646 boe/d in the second quarter, and proceeds will first pay down the revolving credit facility and later be reinvested in Upstream and Midstream growth projects. Provident lowered its 2009 Upstream production guidance to 22,000-23,000 boe/d and is continuing to sell its Lloydminster heavy oil assets, as announced August 13, 2009.

asset acquisition disposition

Provident cut its monthly distribution from $0.09 to $0.06 per unit (annualized $0.72, about 13% yield at the $5.48 close on February 11, 2009) and lowered its 2009 capital budget from $165 million to about $115 million, citing sustained low commodity prices and volatile markets. It reports about $505 million drawn on its $1.125 billion credit facility, expects 2009 Upstream production of 23,500 to 25,000 boe/d, and says Midstream results are expected to decline versus 2008. It also reports positive early Pekisko oil results in Northwest Alberta.

production update

Provident closed the sale of BreitBurn Energy Company for US$305 million (US$295 million cash and a US$10 million note), completing the sale of its entire US oil and gas division announced in February 2008. Total before-tax consideration for the division was US$650 million, with combined after-tax proceeds estimated at $440 million, to be used to pay down debt. This resolves the US business sale thread.

asset acquisition disposition

Provident agreed to sell its remaining US oil and gas holding, its equity in BreitBurn Energy Company, for US$305 million (US$295 million cash plus a US$10 million note) to Metalmark Capital Partners, Greenhill Capital Partners and BreitBurn management, with closing expected before the end of August 2008. Together with the June sale, total before-tax consideration for the US business is US$650 million, which the company says is about a 550% return on its net cash investment. Provident says the tax basis is about $100 million and proceeds above that are expected to be taxable this year. This continues the June sale and the strategic review.

asset acquisition disposition

Provident sold its 22% interest in BreitBurn Energy Partners L.P. and its 96% interest in BreitBurn GP LLC to BreitBurn Energy Partners for US$345 million cash before closing adjustments and taxes, with proceeds first going to its Canadian senior credit facility. The company calls this the first step in the strategic review announced February 5, 2008, and says it is still trying to sell its remaining US oil and gas assets (96% of BreitBurn Energy Company L.P.).

asset acquisition disposition

Provident agreed to make a cash offer for all shares of Capitol Energy Resources at $8.16 per share (about $467 million), and to take on about $41 million of Capitol's net debt, for a total of $508 million. Capitol's board supports the offer, and the deal depends on two-thirds of Capitol shareholders tendering plus regulatory approvals. Provident says the main asset is the Dixonville oil pool in Alberta, which it expects to become its largest upstream operating area; the deal is to be funded by about $325 million of subscription receipts and existing credit facilities. This is a second major Canadian acquisition after Rainbow in 2006.

capital raising announcement

Provident completed the purchase of the Rainbow gas assets in northwestern Alberta for a net price of about C$476 million, adding roughly 5,500 barrels of oil equivalent a day and over 200 identified drilling locations. This completes the deal announced July 11. Subscription receipt holders get one trust unit each plus C$0.12 per receipt, and the rest of the price was paid from credit facilities.

business combination

Provident agreed to buy natural gas assets in the Rainbow and Peace River Arch areas of northwestern Alberta for about $475.9 million, adding about 5,500 barrels of oil equivalent a day (over 90% gas). Provident says it will fund it with roughly equal parts equity and bank debt, raising its senior Canadian credit facility from $800 million to $925 million and arranging a $300 million bridge facility; closing is expected by the end of August 2006. The company states it expects the deal to add about six percent to 2007 cash flow per unit (its own projection).

business combination

Provident Energy Trust agreed with underwriters to sell 16,325,000 subscription receipts at C$13.85 each (about C$226.1 million) to help pay for the Alberta gas asset purchase announced the same day. Each receipt converts to one trust unit when the acquisition closes; if it does not close by September 30, 2006, the money is returned to buyers. The underwriters also have an option for up to 2,448,700 more receipts.

capital raising announcement