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Press release from CNW Group


Tuesday, September 07, 2010

FORT CHICAGO ANNOUNCES PURCHASE OF B.C. HYDRO POWER ASSETS17:00 EDT Tuesday, September 07, 2010/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/Trading Symbol: FCE.UNExchange: TSXCALGARY, Sept. 7 /CNW/ - Fort Chicago Energy Partners L.P. ("Fort Chicago") announced today that it has entered into agreements with ENMAX Corporation of Calgary, Alberta, to acquire interests in ENMAX's portfolio of run-of-river hydroelectric facilities and development projects in B.C. The assets being acquired include 33 megawatts ("MW") generated by three operating assets and rights to other development projects. The aggregate purchase price to be paid by Fort Chicago to ENMAX is $114.9 million, including working capital at closing and project debt of approximately $12 million. Fort Chicago expects to finance the transactions with a planned $55 million long-term financing facility relating to the Clowhom assets described below, with the balance of Fort Chicago's obligations to be funded from equity raised under Fort Chicago's Premium DistributionTM and Distribution Reinvestment Plan.The interests being acquired include: << (i) A 99% interest in the 11 MW Furry Creek hydroelectric facility, operational since 2004, with power produced being sold to BC Hydro under an electricity purchase agreement ("EPA") that expires in 2024; (ii) A 100% interest in two 11MW Clowhom hydroelectric facilities, operational since March 2010, with power produced being sold to BC Hydro under two 25-year EPAs that expire in 2035; and (iii) A 50% interest in the 15 MW Culliton Creek hydroelectric project, which was awarded a 30-year EPA from BC Hydro on March 31, 2010. >> Closing of the transactions, other than the purchase of the Culliton Creek assets which recently closed, will be subject to usual closing conditions and certain regulatory approvals, including the consent of BC Hydro and certain First Nations associated with the various projects. It is anticipated the remaining transactions will close during the fall of this year.Concurrent with entering into the agreements with ENMAX, Fort Chicago has also entered into an agreement with Pristine Power Inc. pursuant to which Pristine may acquire 50% of the interests being acquired by Fort Chicago by paying to Fort Chicago 50% of the ENMAX purchase price and other transaction costs, net of its share of the Clowhom financing. If Pristine does not complete its acquisition at the time Fort Chicago closes the transactions with ENMAX (other than the Culliton Creek transaction), Pristine may elect to pay Fort Chicago $1.5 million in order to extend its purchase right until the later of December 31, 2010 or 90 days after the closing of the transactions with ENMAX. Fort Chicago holds an approximate 12.2% interest in Pristine, a publicly-traded power development company based in Calgary.Stephen White, President and CEO of Fort Chicago commented "This acquisition accelerates Fort Chicago's entry into the run-of-river power industry. The assets provide us with a long-term stream of contracted cash flows and contracted development upside, along with future development opportunities. Combined with the recently closed acquisition of Swift Power Corp., Fort Chicago now has a material run-of-river power footprint in Western Canada and has significantly extended its Canadian tax horizon."Advisors and CounselNational Bank Financial Inc. is acting as financial advisor and Farris, Vaughan, Wills & Murphy LLP are acting as legal counsel to both Fort Chicago and Pristine. CIBC World Markets Inc. is acting as financial advisor and Blake, Cassels & Graydon LLP is acting as legal counsel to ENMAX.Fort ChicagoFort Chicago is a publicly traded limited partnership based in Calgary, Alberta, that owns and operates energy infrastructure assets across North America. Its Class A Units are listed on the TSX under the symbol FCE.UN and its convertible unsecured subordinated debentures, Series B and the Series C Debentures are listed on the TSX under the symbols FCE.DB.B and FCE.DB.C, respectively. Fort Chicago is engaged in three principal businesses: a pipeline transportation business comprised of interests in two pipeline systems, the Alliance Pipeline and the Alberta Ethane Gathering System; an NGL extraction business which includes an interest in a world-class extraction facility near Chicago; and a power business with power facilities in Ontario, New York, Colorado and California, district energy systems in Ontario and Prince Edward Island, and waste heat power facilities along the Alliance Pipeline. Fort Chicago and each of its pipeline, NGL extraction and power businesses are also actively developing a number of greenfield investment opportunities that will be a key source of future growth. In the normal course of its business, Fort Chicago and each of its businesses regularly evaluate and pursue acquisition and development opportunities. << Class A Unit Ownership Restrictions >> Fort Chicago is organized in accordance with the terms and conditions of a limited partnership agreement which provides that no Class A Units may be held by or transferred to, among other things, a person who is a "non-resident" of Canada, a person in which an interest would be a "tax shelter investment" or a partnership which is not a "Canadian partnership" for purposes of the Income Tax Act (Canada).Certain information contained herein relating to, but not limited to, Fort Chicago and its businesses constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Fort Chicago expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "may", "estimate", "anticipate", "believe", "expect", "plan", "intend", "target", "project", "forecast" or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to the timing of the completion of the ENMAX and Pristine acquisition transactions, the source of financing of the ENMAX transactions and the development of greenfield investment opportunities. The risks and uncertainties that may affect the operations, performance, development and results of Fort Chicago's businesses include, but are not limited to, the following factors: the ability of Fort Chicago to successfully implement its strategic initiatives and achieve expected benefits; levels of oil and gas exploration and development activity; the status, credit risk and continued existence of contracted customers; the availability and price of capital; the availability and price of energy commodities; the availability of construction services and materials; fluctuations in foreign exchange and interest rates; Fort Chicago's ability to successfully obtain regulatory approvals; changes in tax, regulatory, environmental, and other laws and regulations; competitive factors in the pipeline, NGL and power industries; operational breakdowns, failures, or other disruptions; and the prevailing economic conditions in North America. Additional information on these and other risks, uncertainties and factors that could affect Fort Chicago's operations or financial results are included in its filings with the securities commissions or similar authorities in each of the provinces of Canada, as may be updated from time to time. Readers are also cautioned that the foregoing list of factors and risks is not exhaustive. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management's future course of action would depend on its assessment of all information at that time. Although Fort Chicago believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual result achieved will vary from the information provided herein and the variations may be material. Fort Chicago makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Fort Chicago does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise. Any forward-looking information contained herein is expressly qualified by this cautionary statement.(TM) denotes trademark of Canaccord Capital CorporationFor further information: Stephen H. White, President and C.E.O., Richard Weech, Vice President, Finance and C.F.O., David I. Holm, Executive Vice President, Corporate and Business Development, Fort Chicago Energy Partners L.P., Livingston Place, Suite 440, 222 - 3rd Avenue S.W., Calgary, AB, T2P 0B4, Phone: (403) 296-0140, Fax: (403) 213-3648,