Progress Energy Trust Acquires Private Company and Sells Assets to ProEx Energy

On April 2, 2007 Progress Energy Trust completed the acquisition of the shares of a unnamed natural gas producer operating in northeast British Columbia and northwest Alberta, for approximately $526 million. Progress is an oil and gas trust headquartered in Calgary.

Progress partially financed the acquisition with the proceeds of a $250 million bought deal subscription receipt financing which closed on March 27, 2007 and with the proceeds of an increased credit facility in the aggregate amount of $375 million. The subscription receipt financing was underwritten by a syndicate led by BMO Nesbitt Burns Inc. and included CIBC World Markets Inc., Scotia Capital Inc., RBC Capital Markets, Canaccord Capital Corporation, FirstEnergy Capital Corp., National Bank Financial Inc., Peters & Co., Raymond James Ltd. and Tristone Capital Inc. The credit facility was provided by a syndicate led by Bank of Montreal and included Canadian Imperial Bank of Commerce, The Bank of Nova Scotia and Société Générale (Canada Branch).

Upon closing of the acquisition, Progress sold certain of the assets to ProEx Energy Ltd. for approximately $135 million. ProEx is an oil and gas explorer and producer headquartered in Calgary.

ProEx partially financed its acquisition with the proceeds of a $100 million bought deal subscription receipt financing which closed on March 27, 2007 and with the proceeds of an increased credit facility in the aggregate amount of $120 million (subsequently increased post-acquisition to $150 million). The subscription receipt financing was underwritten by a syndicate led by BMO Nesbitt Burns Inc. and included CIBC World Markets Inc., Scotia Capital Inc., RBC Capital Markets, Canaccord Capital Corporation, FirstEnergy Capital Corp., National Bank Financial Inc., Peters & Co., Raymond James Ltd. and Tristone Capital Inc. The credit facility was provided by Bank of Montreal.

Progress was represented by Burnet, Duckworth & Palmer LLP on the acquisition and subsequent disposition to ProEx with a team that included John Cuthbertson, Alicia Quesnel, and Stuart Money (oil & gas). Both Progress and ProEx were represented on the subscription receipts financing by Gary Bugeaud, Shannon Gangl and Corrine Fiesel (securities) and David Ross (tax), and on the credit facilities by Trish Fehr and Dave Grout (banking).

ProEx was represented on the acquisition by Wayne Fedun of Macleod Dixon LLP.
The private company was represented by Osler, Hoskin & Harcourt LLP with a team that included Robert Desbarats, Q.C., Janice Buckingham, Paula Olexiuk and Rob Ashcroft (oil & gas).

Bennett Jones LLP represented the underwriting syndicate with a team that included John Kousinioris, Jon Truswell and John Piasta (securities). Margaret Lemay, Andrew Lloyd and Shaheen Amirali of Bennett Jones LLP represented the lending syndicate.