NGP, Riverstone sell Northern Blizzard stakes at loss to Waterous

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By Ted Liu

Waterous Energy Fund has entered into two separate purchase agreements to acquire approximately 67% of the issued and outstanding common shares of Northern Blizzard Resources Inc. (TSX: NBZ) from NGP Energy Capital Management, LLC and Riverstone Holdings, LLC for a purchase price of $3.60 per share for approximately $244 million.

Waterous Energy Fund will acquire 27,426,170 common shares, representing approximately 27.18% of the issued and outstanding common shares from R/C Canada Coöperatief U.A., and 40,316,175 common shares, representing approximately 39.91% of the issued and outstanding common shares, from NGP IX Northern Blizzard S.A.R.L..

Northern Blizzard was incorporated in November 2009 and initially funded by NGP in December 2009. In July 2010, Northern Blizzard acquired Nexen Inc.’s heavy oil properties located in Saskatchewan and Alberta for $944.3 million in cash. The acquisition was funded by $749.7 million of new equity from NGP, Riverstone and management, and $270 million of bank debt.

On August 8, 2014, Northern Blizzard completed $500 million initial public offering an secondary offering priced at $19.00 per share. NGP and Riverstone sold 4,701,601 and 3,193,136 common shares for gross proceeds of $89.3 million and $60.7 million respectively. NGP and Riverstone have not sold any share since.

“I have been following Northern Blizzard’s progress for many years and we are pleased to begin a long-term partnership with CEO John Rooney and President Jim Artindale. Over the last several years, current management’s innovative development processes and techniques have transformed the Saskatchewan focused company’s core Cactus Lake asset into one of North America’s largest vertical well polymer floods. We believe the property’s low decline, long reserve life, and high free cash flow make it a top quartile North American oil asset, which will serve as a platform for future growth for the company. We look forward to working with management and the Board to identify opportunities to further enhance shareholder value,” said WEF Managing Partner and CEO Adam Waterous.

Waterous Energy Fund is a Calgary headquartered oil and gas private equity firm founded by Adam Waterous targeting a focused portfolio of owned and controlled investment opportunities between $100 and $400 million across North America. WEF’s current portfolio includes Strath Resources Ltd., a private oil and gas producer in the Kakwa region of the Montney basin of Alberta. To date, WEF has made equity commitments of approximately $650 million, and post-closing its investment in Northern Blizzard will control assets with an enterprise value in excess of $1 billion.

photo credit: Northern Blizzard

Waterous Energy Fund holds initial close
Waterous Energy Fund