PE Firm Rolls Up Canadian Producers

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Canadian investment firm Waterous has rolled up its two portfolio companies into one, creating what it says is the largest private equity-owned oil producer in North America. Waterous is combining the assets of Strathcona Resources and Osum Oil Sands into a single entity that will retain the Strathcona name, with some 80,000 boe/d of combined production (75% oil and liquids). “Over the past 4½ years we have built Strathcona by consolidating complementary businesses to create a premier energy company with strong ESG [environmental, social and corporate governance] fundamentals,” said Waterous CEO Adam Waterous. “... Strathcona is a stronger business that can both defensively withstand market volatility and offensively continue its consolidation strategy.” In March, Waterous completed a hostile takeover of Osum that was initially announced last November. It acquired all remaining shares of Osum in a transaction finalized in late April. Concurrent with the latest merger, Strathcona has secured a new covenant-based C$1 billion (US$822 million) credit facility with a syndicate of Canadian, US and international banks. It marks the first new covenant-based loan issued to a Canadian oil and gas producer since 2018 and the first ever for a private E&P in Canada, according to Waterous.

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