David, Mylany
Dentons Canada LLP
(514) 878-8816
mylany.david@dentons.com
Ms. David focuses on the
real estate, commercial,
and industrial aspects of
renewable energy projects,
including wind farms and
energy-related transactions.
She advises developers,
buyers and lenders on
development, acquisition
and financing matters.
Davis, omas
R.M. (Tam)
Norton Rose Fulbright
Canada LLP
(514) 847-4857
thomas.davis@nortonroseful-
bright.com
Mr. Davis's business law prac-
tice includes a focus on elec-
trical energy. His domestic
and international experience
embraces project develop-
ment; contracts to purchase,
exchange and store energy;
transmission; distribution;
and water management.
Dell, David A.
Torys LLP
(416) 865-8100
ddell@torys.com
Mr. Dell's practice focuses
on commercial real estate,
infrastructure and energy
projects. His experience
includes construction and
project management ar-
rangements for energy
and power projects.
Davies, QC, Donald G.
Norton Rose Fulbright
Canada LLP
(403) 267-8183
don.davies@nortonroseful-
bright.com
Mr. Davies's energy practice
focuses on regulatory and
litigation matters. His clients
include oil and gas produ-
cers, pipelines, utilities and
industry groups. He appears
before the NEB and provin-
cial regulators including the
AER and the AUC.
De Vuono, Carl A.
McMillan LLP
(416) 307-4055
carl.devuono@mcmillan.ca
Mr. De Vuono practises in
the areas of M&A, corporate
reorganizations, strategic
alliances, and public and
private joint ventures. He is
involved in most aspects of
communications including
cable, broadcasting, media,
and telecommunications.
DeMarco, Lisa (Elisabeth)
Zizzo Allan DeMarco LLP
(647) 991-1190
lisa@zadllp.com
Ms. DeMarco is a leading
energy and climate change
lawyer. She advises govern-
ments, banks and multinational
energy clients on regulatory,
policy, storage, renewables,
pipeline and related matters,
and regularly appears before
many energy regulators.
PRIVATE EQUITY
|
13
royalties on any subsequent hydrocarbon
production on the land.
Newly formed Cenovus subsidiary
Heritage Royalty LP was in the business of
leasing some 4.8 million acres of freehold
lands when Ontario Teachers' Pension Plan
surprised the markets in June by announc-
ing a deal to buy Heritage for $3.3 billion.
Mercury says the deal gives Cenovus a very
large cash infusion, while Teachers' gets an
immediate revenue stream from royalties
on production.
Industry observers have also suggested
there's potential for Teachers' to profit fur-
ther from an eventual Heritage IPO, likely
when oil prices recover. ey say large pen-
sion funds have a longer investment hori-
zon than other sources of private equity,
so they can wait longer on a price rebound,
especially when they're receiving royalties
in the interim.
BDP's Quesnel says another way for oil
companies to attract PE investment is to of-
fer gross overriding royalties on production
from crown lands. e oil company pays
the normal crown royalty to the province,
plus an overriding royalty to a lender such
as a PE fund. e oil producer gets cash to
fund exploration, while the PE investor gets
an immediate revenue stream, derived from
production volumes covered by the agree-
ment. "We're just seeing those types of deals
in the last year or so," she says.
"We're also starting to see private equity
coming from China," Quesnel adds. If Chi-
nese PEs seek to invest in the Canadian en-
ergy sector, she says, it could raise national
security concerns and "it's going to be in-
teresting to see how Investment Canada is
going to handle that."
Torys's Jugnauth says another variant on
pension fund investment is a "platform"
investment company, such as the one cre-
ated by the Ontario Municipal Employees'
Retirement System (OMERS). As an al-
ternative to investing in individual energy
companies, OMERS moved in 2009 to
create its own in-house energy company
by acquiring Guard Resources Ltd. and its
management contracts. Under the name of
OMERS Energy Services it then backed its
newly acquired management team with an
additional $600 million to pursue oil and
gas acquisitions.
Mercury says 2014 was a "banner year"
for PE fundraising and industry players are
now waiting to see how much of that cash
will be ploughed into the sector. Indeed,
Clark says, one of the challenges for the
larger PE players will be finding manage-
ment teams with business plans of sufficient
scale. "One of their big questions is, do we
have a team that can profitably deploy the
amount of capital we want to invest?"
