LEXPERT MAGAZINE
|
NOVEMBER/DECEMBER 2017 11
LEXPERT: is wasn't exactly a straight-
forward deal, with Apache selling assets to
Cardinal Energy and a private buyer at the
same time. Was this a complicating factor
in the acquisition?
Marcus Archer, Norton Rose Fulbright
Canada LLP (for Paramount in its ac-
quisition of Apache Canada): I would
say the transaction was complex and chal-
lenging and, at times, drawn out and tense,
largely due to the fact that Paramount was
acquiring the corporate entity, Apache
Canada Ltd., which was undergoing a con-
current process to market and sell two sig-
nificant asset packages that weren't part of
the deal with Paramount.
LEXPERT: And this was an all-cash deal?
Wayne Fedun, Norton Rose Fulbright
(for Paramount in its acquisition of
Apache Canada): Yes, that's right. Para-
mount sold some of its producing assets
for approximately $2.1 billion in August
of last year and some midstream assets for
approximately $600 million in April of
last year — both large and transformative
transactions for Paramount. ose trans-
actions enabled Paramount to repay all of
its indebtedness and have significant cash
on hand. Paramount was able to acquire
Apache Canada for approximately $460
million with its remaining cash on hand
from the prior year transactions.
LEXPERT: Had the lawyers worked with
each other before?
Kevin Johnson, Norton Rose Ful-
bright (for Paramount and Trilogy on
the merger): We have worked extensively
with Jay Reid and Jake Hoeppner of BDP
and Lee Corbett of Stikeman Elliott. Our
familiarity with each other was very help-
ful in making things go smoothly.
Fedun: As Paramount's counsel for the
Apache acquisition, we worked with Para-
mount's internal legal and business teams
in negotiating the deal with Apache's inter-
nal legal and business development group
out of Houston and Oslers in Calgary, who
was Apache's Canadian counsel.
LEXPERT: Now that both the merger and
acquisition have closed, how do the assets
fit into Paramount's bigger picture?
Fedun: e Apache Canada assets are a
great fit. ey're in very close proximity to
Bringing it Home
the Paramount and Trilogy resource plays.
As Paramount's President and CEO Jim
Riddell said when the acquisition was an-
nounced, Paramount believes the 46,000
Montney acres acquired at Wapiti through
the Apache Canada acquisition are a con-
tinuation of Paramount's liquids rich re-
source play at Karr. Apache Canada's and
Trilogy's complementary land positions at
Kaybob materially increase the size of Para-
mount's resource plays.
LEXPERT: Why was the timing right to
pursue a merger with Trilogy?
Johnson: Paramount had been thinking
about the possibility of a recombination for
some time but there were no formal discus-
sions prior to this transaction.
LEXPERT: I understand the merger was
contingent on the completion of the ac-
quisition of Apache Canada. Why was
that important?
Leland Corbett, Stikeman Elliott LLP
(for Trilogy's Special Committee): Para-
mount communicated early on that it was
important to them that both transactions
be completed together. From Trilogy's per-
spective, the contingency therefore became
necessary so that Trilogy's shareholders
would know what capital structure and
business they were voting themselves into.
ere was always a thought that if the
Apache transaction fell apart, we could re-
visit the terms of the Paramount and Tril-
ogy transaction and try to adjust terms.
Paramount pickup of Apache Canada and related merger show oilpatch repatriation is never dull
INTERVIEW BY GENA SMITH
Marcus
Archer
Norton
Rose
Fulbright
(for
Paramount
Resources)
Wayne
Fedun
Norton
Rose
Fulbright
(for
Paramount
Resources)
Leland
Corbett
Stikeman
Elliott
(for
Trilogy's
Special
Committee)
Jay
Reid
Burnet,
Duckworth
& Palmer (for
Paramount's
Special
Committee)
ON THE DEAL
Paramount Resources was flush with cash and on the hunt. Houston-based Apache
Corp. was selling off its Canadian subsidiary to focus on US shale production against
the backdrop of a prolonged industry slump. The acquisition — which ultimately closed
on August 16 — would add reserves, production and 1.6 million acres of landholdings,
launching Paramount into intermediate producer status. At the same time, Paramount
moved to recombine with Trilogy Energy Corp. in a unique all-share merger. Meanwhile,
Apache was selling its other Canadian assets to two different buyers. For the lawyers
working on the acquisition and related merger, things were about to get interesting.
Kevin
Johnson
Norton
Rose
Fulbright
(for
Paramount
and Trilogy)
