Baytex signs agreement to buy Ranger Oil in deal valued at $3.4B including debt

The Canadian Pres

BAYTEX ENERGY CORP (BTE:CT)

5.64 0.18 (3.30%)

As of: 03/06/23 5:57:49 am
REAL-TIME QUOTE. Prices update every five seconds for TSX-listed stocks

Chart Type - 1year

See Full Stock Page »

Baytex Energy Corp. has signed a deal to buy U.S. company Ranger Oil Corp. in a deal valued at C$3.4 billion, including assumed debt.

Ranger Oil operates in the Eagle Ford shale region in south Texas, an area where Baytex also has assets.

Under the terms of the agreement, Ranger shareholders will receive 7.49 Baytex shares plus US$13.31 in cash for each Ranger common share.

The companies valued the total consideration at about US$44.36 per Ranger share.

Baytex also says it plans to begin paying a dividend once it closes the Ranger Oil deal and increase share buybacks.

The company says management expects to recommend a quarterly dividend payment of 2.25 cents per share.

This report by The Canadian Press was first published Feb. 28, 2023.

 

Markets broadly 'misinterpreted' Baytex's Ranger Oil acquisition: Eric Nuttall

Daniel Johnson , BNN Bloomberg

Following a recent announcement that Baytex Energy Corp. signed an agreement to acquire Ranger Oil Corp., one prominent energy investor said he thinks there is widespread confusion among market participants regarding the deal.

Baytex announced that it signed an agreement to acquire U.S.-based Ranger Oil on Tuesday in a deal valued at $3.4 billion, including assumed debt. The deal would increase Baytex’s presence in the Eagle Ford shale area of south Texas, a region in which Baytex already has assets. 

“We saw Baytex [shares] fall nine per cent on the day of [the announcement] and I think there was a lot of confusion around what were they trying to achieve with that acquisition,” Eric Nuttall, a partner and senior portfolio manager at Ninepoint Partners, said in an interview with BNN Bloomberg Thursday.

The Calgary-based energy company said it plans to start paying out dividends to investors and increasing share buybacks after its acquisition deal closes. 

“So the attributes for which we liked Baytex before, I always think about mergers and acquisitions, do I like the company better today than I did yesterday? Are they a better company today than they were yesterday? I would say, 'yes,'” said Nuttall.

Nuttall said his organization “crunched the numbers” on the acquisition and found it could result in a cash flow accretion of roughly 20 per cent per share. 

“Meaning next year, 2024, every share will generate 20 per cent more free cash flow. It also allows them to expedite how much of the free cash they're getting back,” he said. 

However, Nuttall said following acquisition announcement he thinks there is a short-term overhang on the stock and recommends the company market “aggressively” to try and find a new U.S. investor.

“We’ve been very clear on what we want from our major holdings. We want them to maximize free cash flow, we want them to increase cash flow, and we want them to pay it back to us. And I think people misinterpreted the acquisition and how that helps Baytex achieve that,” he said. 

Bay du Nord not liable for end-use emissions, marine shipping, company lawyer says

The Canadian Press

A lawyer representing the Norwegian energy firm behind a proposed offshore oil project in Newfoundland and Labrador says the company is only responsible for the immediate environmental impact of the project itself.

Environment groups and eight Mi'kmaq communities in New Brunswick are asking the Federal Court this week to overturn Bay du Nord's federal approval for using a flawed environmental assessment.

They say the review didn't look at the end-use greenhouse gas emissions from the oil Bay du Nord will produce or the marine impact of extra oil tankers in the North Atlantic Ocean.

Equinor's Canadian lawyer told the judge today neither of those are within the direct scope of the project and were rightfully not considered.

The groups opposing the project say in 2018 the Federal Court of Appeal overturned approval for the Trans Mountain pipeline in part because it failed to fully consider the impact of oil tankers on killer whales.

Equinor's lawyer says unlike Trans Mountain, the Bay du Nord project has multiple options for routes to ship the oil and there is no certainty yet on who will buy it or where it will go.

This report by The Canadian Press was first published March 2, 2023.

First Horizon tumbles on TD’s delayed US$13.4 billion takeover

Kevin Orland, Bloomberg News

Toronto-Dominion Bank’s US$13.4 billion acquisition of First Horizon Corp. may be delayed even more than the Canadian lender projected last month. Shares of the Memphis, Tennessee-based bank slumped.

First Horizon was told by Toronto-Dominion that it doesn’t expect to receive the necessary regulatory approvals by May 27 — as it had projected in early February — and that it can’t provide a new projected closing date, according to a regulatory filing Wednesday.

“TD has initiated discussions with FHN regarding a potential further extension of the outside date,” First Horizon said in the filing. “There can be no assurance that an extension will ultimately be agreed or that TD will satisfy all regulatory requirements so that the regulatory approvals required to complete” the takeover.

First Horizon shares slid 12 per cent to US$21.69 at 11:17 a.m. in New York. Toronto-Dominion declined 0.7 per cent to C$90.18 in Toronto.

“Although we believe that this is simply a required regulatory disclosure, we cannot deny that it brings additional uncertainty in terms of the timing and ultimate completion of the acquisition of First Horizon by TD,” Barclays Plc analyst John Aiken said in a note to clients. “The likelihood of the deal not being completed has increased based on this disclosure.”

Toronto-Dominion said in an emailed statement that it “remains committed to the transaction,” but can’t comment further until it reports fiscal first-quarter results Thursday.

Toronto-Dominion is working on a major U.S. expansion centered on the First Horizon deal, which would give it more than 400 new branches in the country and add more than 1.1 million individual and business customers across 12 states, primarily in the Southeast. The bank also is bulking up its presence in US capital markets with the us$1.3 billion acquisition of Cowen Inc., a deal that has received regulatory approvals and was on track to close Wednesday.

The First Horizon deal has faced more opposition in Washington, with Senator Elizabeth Warren calling for regulators to block the deal.

“We believe that TD is ultimately still committed to the deal,” research firm United First Partners said in a note. “We think today’s selloff is largely overdone and would recommend buying into the weakness.”

ICYMI

Majority of Canadians feel like they're being targeted more than ever by financial fraud: Survey

Hilary Punchard, BNN Bloomberg 

The majority of Canadians feel like they’re being targeted more than ever by financial fraud, according to a survey by TD Bank Group.

In a survey released Tuesday, it found six-out-of-10 Canadians (62 per cent) say they’re being targeted by financial fraudsters and almost eight-in-10 (78 per cent) say they don’t have confidence in their ability to identify scams.

It also found almost half of respondents (47 per cent) think a higher cost of living will make them more vulnerable to financial fraud and scams.

"As Canadians report being targeted by a record number of financial fraud attempts, many can benefit from using the tools and resources available to protect themselves and their loved ones," Mohamed Manji, vice-president of Canadian fraud management at TD, said in the report.

"It's very important to exercise caution, especially at a time when fraudsters may take advantage of the economic challenges many Canadians are currently facing.”

TOP FINANCIAL SCAMS

When it comes to being targeted for financial scams, the most common method Canadians reported was email and text message fraud (72 per cent), followed by phone calls (66 per cent).

The report found less individuals are being targeted over social media, with only 26 per cent reporting cases of fraud on these platforms.

Canadians also said the biggest factor behind financial fraud targets are their age  (43 per cent), followed by loneliness (35 per cent), newcomers (34 per cent) and financial hardship (32 per cent).

STIGMA AROUND FALLING FOR FINANCIAL FRAUD

The report said there’s still a large stigma around falling victim to financial fraud.

Almost one-third (31 per cent) of Canadians said they wouldn’t tell someone if they fell for a scam.

Another report released by CPA Canada on Tuesday found younger Canadians are more likely to suffer from fraud, with 63 per cent of individuals aged 18 to 34 reporting that they’ve been taken advantage of by fraudsters at least once in their life.

The CPA survey said one of the big reasons behind this is younger Canadians’ online exposure. It found 78 per cent of respondents said they use online banking for their debit cards, while 72 per cent monitor their credit cards online.

“The more we're online, the more we're opening ourselves up to smart scammers, so extra diligence is required,” Doretta Thompson, financial literacy leader at CPA Canada, said in the release.

PLEASE SIR CAN I 'AVE SOME MORE

Enbridge CEO hopes for more carbon capture support in upcoming federal budget

The Canadian Press

The CEO of energy infrastructure giant Enbridge Inc. says he hopes the federal government will unveil more incentives for carbon capture and storage in the upcoming federal budget.

Greg Ebel says the U.S. is currently a more attractive place for companies seeking to invest in carbon capture technology.

He says the Inflation Reduction Act in the U.S. offers incentives that reduce the capital costs as well as on ongoing operating costs for carbon capture.

Canada's energy industry has identified carbon capture and storage as key to its plan to reduce greenhouse gas emissions.

Companies have proposed approximately 25 different projects aiming to capture carbon from Alberta's oil and gas sector.

Among these is Enbridge's Open Access Wabamun Carbon Hub to be located northwest of Edmonton.

Enbridge earmarks $3.3 billion for Gulf Coast storage plant, other projects

Amanda Stephenson, The Canadian Press

ENBRIDGE INC (ENB:CT)

52.83 0.27 (0.51%)

As of: 03/06/23 5:19:48 am
REAL-TIME QUOTE. Prices update every five seconds for TSX-listed stocks

Chart Type - 1year

See Full Stock Page »

A U.S. Gulf Coast gas storage facility and a stake in a company developing fuel from waste food are among a string of new investments announced by Canadian energy giant Enbridge Inc. on Wednesday.

At its annual investor day event, the Calgary-based company announced $3.3 billion in new investments it says will help Enbridge grow to meet increasing global demand for energy.

The new investments include a deal to acquire Tres Palacios Holdings LLC from Brookfield Infrastructure Partners and Crestwood Equity Partners LP for US$335 million. Tres Palacios is a natural gas storage facility in the U.S. Gulf Coast region, which has been a focus for Enbridge in the last several years.

The deal is expected to close in the second quarter of 2023.

Enbridge will also acquire a 10 per cent stake in Divert Inc., a food waste management company expanding into renewable natural gas, for US$80 million.

That agreement includes further investment opportunities to develop RNG projects across the U.S., Enbridge said, providing potentially more than $1 billion in new capital growth. 

And the company said it will go ahead with plans to build the Enbridge Houston Oil Terminal for an initial capital cost of $240 million. The facility will focus on heavy crude and will have access to the Houston region's refining complex and export opportunities through the Seaway docks at Freeport and Texas City.

On Wednesday, Enbridge reaffirmed its 2023 earnings guidance of $15.9-$16.5 billion, and also said it expects its earnings per share to grow at a compounded annual rate of between four and six per cent through 2025.

In his remarks to investors, CEO Greg Ebel said 2022 was an "inflection" point for Canada's energy industry as years of underinvestment coupled with Russia's invasion of Ukraine to drive unprecedented commodity price spikes.

He said Enbridge is well positioned to help "rebalance" the global energy system.

"The bottom line is we see plenty of executable growth across our business units and the existing asset base," Ebel said.

"We are excited about our growth opportunities in the short and medium term."

Ebel said as the energy transition takes hold, renewable energy will continue to grow and Enbridge continues to explore opportunities in new, low-carbon forms of energy such as renewable natural gas.

But he said natural gas and oil will remain critical parts of the energy mix for the foreseeable future. Natural gas, in particular, will be needed as a reliable backup given the intermittent nature of wind and solar power, he said.

Enbridge also announced on Wednesday $2.4 billion of new gas transmission modernization and utility spending to its secured capital program.

The company also said it will build a 14-kilometre natural gas pipeline in Ontario to help ArcelorMittal Dofasco's plan to change the way it makes steel.

Enbridge's medium-term growth expectations "appear reasonable," said RBC Dominion Securities analyst Robert Kwan in a note, adding the investor day updates Wednesday were consistent with the market's expectations.

This report by The Canadian Press was first published March 1, 2023.

Oil and gas investment in Canada to 

hit $40 billion in 2023, industry group 

says

The Canadian Pres

The Canadian Association of Petroleum Producers says it expects investment in oil and natural gas production in this country to hit $40 billion this year. 

The industry group says that's 11 per cent higher than last year and also surpasses pre-COVID-19 pandemic levels.

Upstream oil and natural gas investment in Canada reached a low of $22 billion in 2020, as prices collapsed due to the pandemic.

CAPP says conventional oil and natural gas capital investment for 2023 is forecast at $28.5 billion, while oilsands investment is expected to reach $11.5 billion.

CAPP says much of this year's increased spending will go towards maintenance and incremental growth projects, as well as managing inflationary pressures.

The lobby group says spending is also expected to go towards emission reduction technologies such as advancing the development of carbon capture utilization and storage (CCUS).

This report by The Canadian Press was first published March 1, 2023.