PrimeWest Acquires Gas Assets and Completes Offering

A wholly owned subsidiary of Calgary-based PrimeWest Energy Trust acquired two subsidiaries of a U.S.-based oil and gas company on January 23, 2003. The purchase price, net of adjustments, was approximately $206 million. The assets of the acquired companies consisted of Alberta-based natural gas producing properties and related midstream assets. PrimeWest initially funded the acquisition with bank debt, including a bridge loan provided by its lending syndicate.

On February 13, the trust completed a bought deal financing, resulting in the issuance of six million trust units at $25.75 per trust unit, for aggregate gross proceeds of $154.5 million. The underwriting syndicate was led by Scotia Capital Inc. and CIBC World Markets Inc., and included BMO Nesbitt Burns Inc., RBC Dominion Securities Inc., TD Securities Inc., National Bank Financial Inc., Canaccord Capital Corporation, Dundee Securities Corporation and Yorkton Securities Inc. The net proceeds of the offering were used to reduce bank debt, including debt incurred in connection with the acquisition described above.

PrimeWest was represented by Stikeman Elliott LLP, with a team that included Leland Corbett, Keith Chatwin and Michael Dyck (corporate and securities), Shawn Neylan and Catherine McKenna (regulatory) and Lianne Miller and David Weekes (tax). The vendor of the acquired companies was represented by Mark Smith, Kevin Scott and Andrea Whyte (corporate and securities), Steve Sansom (competition) and Don Watkins and Nancy Diep (tax) of Osler, Hoskin & Harcourt LLP. The lending syndicate was represented by Kevin Fougere and Louise Aurigemma of Blake, Cassels & Graydon LLP. Macleod Dixon LLP acted for the underwriters, with a team that included Kent Kufeldt and Jamie Gagner (securities) and Darren Hueppelsheuser (tax).