COST Acquires Interest in Syncrude Venture

On February 28, 2003, Canadian Oil Sands Trust (COST), acquired an additional 10 per cent interest (with an option to acquire an additional 3.75 per cent interest) in the Syncrude joint venture from EnCana Corporation for approximately $1.07 billion in cash, making COST the largest owner in the Syncrude joint venture with a 31.74 per cent interest. COST financed the acquisition with approximately 68 per cent equity and 32 per cent debt. The equity financing comprised: (1) an approximate $430 million public offering in Canada, with a portion of that resold by the underwriters into the U.S. pursuant to Rule 144A; and (2) an approximate $325 million private placement to a large institutional investor in the U.S.

The COST legal team was led by Trudy Curran, general counsel and corporate secretary. In Canada, COST was represented by McCarthy Tétrault LLP in Calgary, with a team that included Richard Shaw, Q.C., Karen Wiwchar, David Phillips, Annie Tétrault, Graham Young and Ryan Hunter (corporate/securities), Michael McIntosh, Kristine Kennedy and Kelsey Clark (banking) and Rick Pawluk and Glen MacArthur (competition). David Ross of Burnet, Duckworth & Palmer LLP provided tax advice. In the U.S., COST was represented by Edwin Maynard, David Sicular, Matias Milet and Ian Putnam of Paul, Weiss, Rifkind, Wharton & Garrison.

EnCana was represented by in-house counsel Patricia Smith-Grayton; by Rob Desbarats, John MacNeil, Patrick Maguire, Cameron Chiasson, John Piasta and Andrew Lamb of Bennett Jones LLP; and by Brian Felesky, Q.C., Brent Perry, Q.C., and John Burghardt (tax) of Felesky Flynn LLP.

The underwriters and banks, led by CIBC World Markets Inc. and Merrill Lynch Canada Inc., were represented by Macleod Dixon LLP, with a team that included Kevin Johnson and Kent Kufeldt (corporate/securities), Rick Borden (banking) and Harold Jacques and Marcus Archer.