February 26, 2019

Filing Type:

Company Counsel: Bennett Jones

Trustee: Hardie & Kelly

Trustee Counsel: BLG

Industry:

Province:

Elcano Group, a Calgary, Alberta-based independent oil and gas exploration, development, and production company, filed for protection under the CCAA on February 26, listing approximately $9.3MM in liabilities, including $6.3MM to National Bank of Canada ("NBC") under its primary credit facility. Several key factors have resulted in the company having constrained working capital, including the recent volatility of West Texas Intermediate (WTI) oil prices, the effect of mandated hedging programs, the softening of the Canadian dollar, the deteriorating differential price for Canadian-produced crude oil, and temporary operational challenges. Finally, the company has limited access to necessary cash flow for reinvestment due to its significant monthly payments to NBC. Since November 2018, the company has been assisted by Meta Capital Advisors to conduct a marketing process to seek investments in the company. Thus far, it has received a number of letters of intent which offer consideration sufficient to repay NBC in full, pay all of the company's liabilities, as well as provide value to the group's shareholders. The company currently requires a stay of proceedings in order to, amongst other things, provide the company with enough time to run a comprehensive and transparent sale and investment solicitation process. The company has retained the services of GMP FirstEnergy, a leading independent global energy investment bank, to assist in this sale and investment process. Hardie & Kelly was appointed monitor. Counsel is Bennett Jones for the company and BLG for the monitor.

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