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2016
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LEXPERT 5
have a reputation for being patient
investors who care about their repu-
tation in the energy sector. ey're
oen prepared to do "work-offs" —
finding a way to rewrite loan terms
and credit facilities to give a com-
pany some relief in hard times when
it appears it could be about to break
loan terms or debt covenants.
at kind of lender patience is not
always the case, though, for compa-
nies with what's known as mezzanine
debt or second-lien debt, notes Frank
Turner, Calgary-based co-chair of
Osler, Hoskin & Harcourt LLP's cor-
porate group. Such debt oen chang-
es hands and can end up in the talons
of vulture funds; funds that look to
make money over much shorter time
frames or that hope to leverage the
debt a company owes them into an
ownership position. en they can
sell off their stake or the assets of a
company for a profit. With these
kinds of impatient creditors, says
Turner, "it's a different conversation"
than with big banks. "It can turn ad-
versarial for sure."
Forget hunkering down
It used to be, says Turner, that a prime
strategy for hurting energy compa-
nies was to "wait it out and hunker
down." Not this time. "In the past,"
he recalls, "prices have declined pre-
cipitously for a period of time, then
rebounded sharply." Hunkering could work.
But "this is a more profound downturn than we
have experienced in the last ten years," says Turner.
Sensing in 2014 where things might be headed,
Osler began preparing for the kind of work they
expected this bust would bring. "We thought, what
would be the response of our clients? Typically
what happens in this situation is, you attempt to
cut your expenditures to the bone. And if that is
not sufficient then you need to raise additional
capital, and you do that by monetizing your assets."
at, indeed, was the first-wave response to the
price crisis in the patch. Wobbly companies began
selling off royalties on assets, or the assets them-
selves. "As we got deeper in the cycle," continues
Turner, "we formed the view we were going to see
more insolvency and restructuring work. And that
too came to pass, though I think in some respects,
not as much as people thought."
Now, Turner points out, with more clarity out
there about the likely go-forward oil and gas prices
in the current slump, he's seeing a third wave: op-
portunistic M&A as the "strategics" begin poun-
Arthur, Crispin J. Lawson Lundell LLP
(403) 218-7546 carthur@lawsonlundell.com
Mr. Arthur focuses on corporate finance and M&A, primarily for oil and gas
sector clients. His experience embraces public offerings, private placements,
take-overs, plans of arrangement and other business combinations. He also
counsels on governance matters.
Armstrong, Robert L. Gowling WLG
(416) 862-3594 robert.armstrong@gowlingwlg.com
Mr. Armstrong is an advocate. He has experience as a trial and appellate
lawyer and as a strategist and creative problem-solver in complex,
multi-party, multi-jurisdictional disputes, working closely with Canadian
and international clients and counsel.
Antonopoulos, George Dentons Canada LLP
(403) 268-7136 george.antonopoulos@dentons.com
Mr. Antonopoulos acts for companies in the energy sector, focusing on
the planning, drafting, negotiation and completion of complex energy
transactions and project work in both the upstream and midstream oil and
gas sectors, including advising clients on M&A, joint venture arrangements,
commodity transportation, storage arrangements, corporate re-organizations
and energy project development.
Alexander, Jr., Frank C. Dentons Canada LLP
(403) 268-3062 frank.alexander@dentons.com
Mr. Alexander counsels energy companies on petroleum projects worldwide
including government petroleum contracts (PSCs); JOAs; farmout agreements
and SPAs; study and bid agreements; AMI agreements; unitization
agreements; and gas sales agreements. He is the leader of Dentons
Canada LLP International Petroleum Practice Group.
Ainley, William M. Davies Ward Phillips
& Vineberg LLP (416) 863-5509 wainley@dwpv.com
Mr. Ainley has been lead counsel for bidders and target boards in many
of Canada's largest, most complex public company M&A transactions.
He frequently advises foreign investors on strategic investments in Canadian
resource and energy companies and has acted on behalf of foreign
purchasers on numerous acquisitions of major Canadian resource companies.
Abdel-Aziz, Ahab Gowling WLG
(416) 814-5608 ahab.abdelaziz@gowlingwlg.com
Mr. Abdel-Aziz, Gowling WLG's Global Director of Nuclear, has been a leading
advisor to international nuclear industry and governments for over 25 years
on policy, legislation, project development, finance, licensing, compliance
and dispute resolution.
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