Zargon Oil & Gas Ltd. (TSX:ZAR), a Calgary, Alberta-based oil and gas producer, filed an NOI on September 8, listing approximately $9.2 million in liabilities. Currently, the company is actively engaged in discussions with an arm’s length third party in connection with the company's potential restructuring. These discussions are focused on obtaining the additional financing necessary to provide the company with increased liquidity and its creditors with a better outcome than the alternatives currently available. MNP is the proposal trustee. Counsel is Burnet, Duckworth & Palmer for the company and McMillan for the proposal trustee.
Raptor Rig Ltd., a Calgary, Alberta-based drilling company specializing in the creation of automated drilling and coil tubing rigs, was placed in receivership on August 10 on application by Halliburton Global Affiliates Holdings, owed approximately $35.5 million. FTI Consulting was appointed receiver. Norton Rose Fulbright is counsel to the applicant.
Clearbeach Resources, a London, Ontario-based oil and gas company operating in southwestern Ontario, filed an NOI on July 22, listing $28.2 million in liabilities, including $9.0 million to PACE Savings and Credit Union Limited, its primary secured creditor. Causes of financial difficulty are primarily tied to depressed oil and gas prices. Richter is the proposal trustee. Counsel is Bennett Jones for the company, BLG for Richter, and Aird & Berlis for PACE.
Cabot Energy Inc., a Calgary, Alberta-based company in the oil and gas field services industry, filed an NOI on June 30, listing approximately $47.7 million in liabilities. Grant Thornton is the proposal trustee.
Cequence Energy Ltd. (TSX:CQE), a Calgary, Alberta-based company engaged in the acquisition, exploration, development, and production of petroleum and natural gas reserves in Western Canada — along with its subsidiaries — obtained protection under the CCAA on June 11, listing approximately $112.7 million in liabilities. The companies, which reported operating losses for the last five years, have a working capital deficiency of $10.3 million and a secured term loan outstanding of $50.0 million. They are currently in the midst of a liquidity crisis, primarily due to low commodity prices, declining production volumes, onerous contractual obligations, and significant debt. As a result of these factors and based on current cash balances, the companies will be unable to fund their financial commitments in 2020 absent a restructuring of their affairs. During the CCAA proceedings, the companies will be seeking up to $7.0 million in DIP financing from its second lien lenders. EY was appointed monitor. Counsel is Norton Rose Fulbright for the companies, BDP Law for CIBC, BLG for the second lien lenders, and McCarthy Tétrault for EY.
Bow River Energy Ltd., a Calgary, Alberta-based junior oil and gas producer, filed for protection under the CCAA on June 1. The company has been impacted by the various industry challenges facing Western Canadian oil and natural gas markets, including a precipitous decline in oil and natural gas prices over the past five months. Although the company was able to successfully emerge out of the 2014 and 2018 economic downturns, the more dramatic downturn in the last several months has presented difficulties which the company has not been able to overcome. In April, Western Canadian Select oil prices declined 92% in comparison to the 2019 average prices. This decline in price proved disastrous for the company and it estimates a 350% drop in cash flow. In addition, the company's operations have been adversely impacted by social distancing measures. BDO was appointed monitor. Counsel is BLG for the company and Bennett Jones for the monitor.
Q'Max Solutions Inc., a Calgary, Alberta-based oilfield services provider, along with its affiliates (collectively, the "Q'Max Group"), were placed in receivership on May 28 on application by HSBC Canada, as administrative agent for a syndicate of lenders (the "Agent"), owed approximately $145.4 million (USD) and $1.2 million (CAD). The syndicate is currently comprised of HSBC, BMO, BDC, Export Development Canada, and HSBC USA. In recent months, the business of the Q'Max Group has been negatively impacted by depressed oil and natural gas pricing and a corresponding reduction in rig and drilling activity. Such negative impacts were exacerbated by public health restrictions in response to COVID-19. KPMG was appointed receiver. Norton Rose Fulbright is counsel to the Agent.
Delphi Energy (TSX:DEE), a Calgary, Alberta-based junior energy producer focused on the exploration and development of conventional natural gas, shale gas and natural gas liquids in Alberta and British Columbia, obtained protection under the CCAA on April 14. The company had already attempted to restructure its debt-heavy balance sheet in November 2019 through a Plan of Arrangement under the CBCA, but just as it was emerging from that restructuring, the price of oil and gas started to fall dramatically beginning in December 2019. This, coupled with the impact of the COVID-19 pandemic, has resulted in a forecasted 29% drop in cash flow for Q1 2020, and the company expected to imminently breach a financial covenant under its loan agreement with its first lien lenders (ATB, BMO and BNS). While under creditor protection, the company plans on conducting a sales and investment solicitation process. PwC is the monitor. Counsel is Osler for the company and BLG for the monitor.
Direct Oil & Gas Inc., an oil and gas venture with producing properties in northern Alberta, filed for bankruptcy on February 28, listing approximately $16.6 million in liabilities, including $10.0 million to Rothwell Enterprises. Currently, the company's net production revenues are insufficient to cover operating and financing costs. MNP is the bankruptcy trustee. Due to the drastic downturn in oil prices after its appointment, MNP in consultation with Sproule Energy Consultants determined that all of the properties should be shut in. This shut in was completed on March 21. Gowlings is counsel to MNP.
Strategic Oil & Gas (TSX-V: SOG), a Calgary Alberta-based junior oil and gas company, along with its wholly owned subsidiary, Strategic Transmission, had its CCAA proceedings transitioned to a court-appointed receivership on January 28. In early January 2020, the company approached the Alberta Energy Regulator ("AER") with its high level plan of compromise and arrangement to exit the CCAA proceedings. The plan called for, among other things, a payment of $5.0 million to the Orphan Well Association ("OWA") in respect of certain assets the company was seeking to have abandoned and a proposed dividend of $0.10 on the dollar for the company's trade creditors, owed an estimated $10.6 million. In mid-January, the AER notified the company that it was not supportive of the proposed plan. In response, the company advised that it had no further options with respect to a restructuring and planned to wind up its operations and transition its assets to the OWA through a court-appointed receivership. KPMG was appointed receiver of the company's Alberta assets. Alvarez & Marsal is the receiver of the company's assets in the Northwest Territories. Counsel is Dentons for the company, Torys for KPMG, Bennett Jones for GMT Capital, a secured debenture holder and Cassels Brock for the Government of the Northwest Territories.