CPPIB-backed Wolf closes $1.61 bln buy of MEG energy assets

Calgary-based energy infrastructure company Wolf Midstream Inc has closed its acquisition of MEG Energy Corp‘s 50 percent interest in the Access Pipeline and 100 percent interest in the Stonefell Terminal. The transaction, announced in February, reflected a value of $1.61 billion. Canada Pension Plan Investment Board, which has partnered with Wolf since 2015, invested $703 million. As a result, Wolf gained 100 percent ownership of Access, operator of a heavy oil transportation pipeline network servicing facilities in Alberta. Two years ago, the company acquired a 50 percent stake in Access from Devon Energy Corp for $1.4 billion.

PRESS RELEASE

Wolf Midstream Completes Acquisition of Remaining 50% Interest in Access Pipeline

CALGARY, March 22, 2018 /CNW/ – Wolf Midstream Inc. (Wolf) announced today that it has closed the acquisition of the previously announced agreement to acquire MEG Energy Corp.’s (MEG) 50% ownership interest in Access Pipeline (Access) and 100% ownership in the Stonefell Terminal for $1.52 billion plus capital commitments of approximately $90 million. With this acquisition, Wolf is the 100% owner and operator of Access. Wolf completed the acquisition of its initial 50% interest in Access in October 2016. This transaction includes an initial term commitment of 30 years from MEG with respect to transportation services on Access and the use of the Stonefell Terminal.

The Access Pipeline system includes pipelines that transport blended bitumen and diluent between the Christina Lake area of Northeastern Alberta and Edmonton. The Stonefell Terminal connects MEG’s production facilities, through the Access system, to additional distribution connections, serving as a launch point for large volumes of blended products to reach multiple markets.

“As the Access owner and operator, Wolf now has a tremendous opportunity to expand Access Pipeline’s capacity for bitumen blend and diluent to serve both MEG and Devon as well as third parties,” said Gord Salahor, Wolf’s Chief Executive Officer. “We are pleased that this transaction has positioned MEG as an anchor tenant for solvent service on the unutilized Access 16-inch pipeline and prompted additional interest among both natural gas liquids suppliers and oil sands producers.”

The transaction was funded by Wolf through an investment by Canada Pension Plan Investment Board (CPPIB) of $703 million, third-party debt financing and cash on hand. CIBC Capital Markets acted as lead financial advisor to Wolf on the transaction. RBC Capital Markets acted as financial advisor and as lead left debt underwriter along with joint-bookrunners CIBC Capital Markets, Scotiabank Global Banking and Markets, and TD Securities. Norton Rose Fulbright Canada LLP acted as legal advisor to Wolf on this transaction.

About Wolf Midstream
Wolf Midstream is a private company based in Calgary dedicated to building, owning, and operating energy infrastructure. Wolf was formed in 2016 with an equity investment from CPPIB to focus on acquisition and development opportunities in Western Canada. Wolf management has a long and successful track record of operating energy infrastructure assets having previously led Mistral Energy Inc. and Taylor NGL Limited Partnership (formerly TSX: TAY.UN).

For further information: David Kaiser, Kaiser Lachance Communications Inc., david.kaiser@kaiserlachance.com, (647) 390-8551

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