Bellatrix Exploration (TSX: BXE), a Calgary, Alberta-based oil and gas company, obtained protection under the CCAA on October 2. Facing declining revenues and increasing liquidity challenges as a result of prolonged difficult market conditions, the company made several attempts to improve its capital structure. In June 2019, the company completed a recapitalization transaction pursuant to a CBCA plan of arrangement that, among other things, reduced its debt obligations by approximately $110.0 million. Despite this, commodity prices have slid lower in the last several months, resulting in a near term liquidity crisis. In light of these challenges, the company sought creditor protection to provide stability for the business, additional time to pursue a sale and investment solicitation process and time to advance potential restructuring alternatives. The CCAA proceedings will also give the company access to much needed interim financing. PwC is the monitor. Counsel is Goodmans for the company and BLG for the monitor.
Bearstone Environmental Solutions, a Calgary, Alberta-based oil and gas and environmental services company, was placed in receivership on August 6 on application by Nations Fund I, owed approximately $5.1 million. The depressed oil and gas prices experienced since 2014 have had a significantly negative effect on Bearstone's business, especially its fluid transportation business in Grande Prairie. Recently, the production curtailment program mandated by the Government of Alberta in November 2018 resulted in a drastic decline in activity, and in December 2018 the decision was made to cease operations at the Grande Prairie location. In consultation with its secured lender, Bearstone's parent company has structured a transaction to sell Bearstone's vacuum and water truck services businesses, as well as its environmental services business, to a related company. The transaction will be completed through the receivership. KPMG was appointed receiver. Counsel is Bennett Jones for the applicant, Osler for the company and Cassels Brock for the receiver.
Ajax Petroleum, an Ajax, Ontario-based gas station operator and commercial property owner, was placed in receivership on July 31 on application by BDC, owed approximately $8.5 million. BDC alleges that the debtor made material misrepresentations regarding the purpose of the loan and its business operations, falsified a commercial lease and provided sham financial statements. msi Spergel (GRIP) is the receiver. Counsel is Chaitons for the applicant and Sherman Brown for the company.
Petrocapita Oil and Gas, a Calgary, Alberta-based oil and gas exploration company with operations in Alberta and Saskatchewan, was placed in receivership on June 11 on application by Safeway Holdings, owed approximately $8.1MM. The company attempted to sell its assets informally earlier in the year with the assistance of Sayer Energy Advisors but was unsuccessful, and it has admitted that it cannot repay the amounts due and owing to Safeway. Hudson & Company (GRIP) was appointed receiver. Counsel is Burnet, Duckworth & Palmer for the applicant, Bennett Jones for the company and Dentons for the receiver.
Trident Exploration, a Calgary, Alberta-based natural gas production company, was placed in receivership on May 3 on application by the Alberta Energy Regulator's Orphan Well Association. The AER had been in discussions with the company since February 2019 regarding its financial difficulties as well as a potential debtor-led restructuring of the company's business and operations. On April 29, the company advised the AER that it may be unable to continue operations at its licensed sites. The AER responded by issuing an order directing the company to address end-of-life obligations associated with 4,400 energy licensed sites, either by decommissioning those sites, posting financial security or transferring the sites to responsible energy companies. With no funds to even enter into creditor protection, the company ceased operations the next day, terminating its 33 employees and 61 contractors and leaving its wells to the care of the AER, including proximately 1,500 wells that were not shut-in and continue to produce. It is estimated that the company's abandonment and reclamation obligations total approximately $329.0MM. The company also owes its secured lenders an additional $90.0MM and has unpaid property taxes of over $2.0MM. In the interest of public safety, the Orphan Well Association applied for a receiver to be appointed to ensure that the company's wells are properly cared for and maintained and shut-in where necessary. The Orphan Well Association is also hoping that, where possible, wells and other oil and gas assets can be sold to responsible producers to avoid having further assets designated as orphan wells. PwC was appointed receiver. Counsel is BLG for the applicant, Norton Rose Fulbright for the company, Bennett Jones for the receiver, Torys for Aimco, Blakes for ATB Financial and Brownlee for Stettler and Woodlands Counties
Patriot Equipment, a Medicine Hat, Alberta-based oil and gas field services supplier, was placed in receivership on April 11 on application by RBC, owed approximately $892.4M. In or about late 2018 and early 2019, RBC discovered that Patriot had failed to disclose its liability for an oil spill on a third party's property, as well as committing several other acts of default. The receivership application was adjourned in early March to permit Patriot time to payout the RBC indebtedness, however proposed financing fell through and the amount was not repaid. KPMG was appointed receiver. Counsel is Osler for the applicant and BDP for the receiver.
Strategic Oil & Gas (TSX-V: SOG), a Calgary, Alberta-based junior oil and gas company, along with its wholly owned subsidiary, Strategic Transmission, obtained protection under the CCAA on April 10. Focused primarily on oil and gas development in Northern Alberta, the company cites several key factors that have led to its current financial position, including deteriorating differentials on Canadian oil prices and political uncertainty with respect to pipeline approvals at the Federal level. In June, 2018, the company entered into a transaction to sell certain of its assets. Despite the sale closing, however, the proposed purchaser was unable to meet the Liability Management Ratio requirements of the Alberta Energy Regulator to facilitate the necessary license transfers. As a result, Strategic was forced to unwind the transaction, further weakening its financial position. With no capital available to fund further development and drilling improvements, the company will look to complete a sale and investment solicitation process while under creditor protection. KPMG was appointed monitor. Counsel is Dentons for the applicant and Torys for the monitor.
Dundee Energy Ltd., a Toronto, Ontario-based oil and natural gas company, filed for bankruptcy on March 29. The company's principal subsidiary, Dundee Energy Limited Partnership, was already subject to insolvency proceedings and a sale of substantially all of the partnership's assets had been completed in November 2018. MNP is the bankruptcy trustee.
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.
Horseshoe Bay Resources, a Calgary, Alberta-based exploration and production company, filed for bankruptcy on January 9. Grant Thornton is the bankruptcy trustee.