Press release from CNW Group
VERESEN INC. ANNOUNCES CLOSING OF PURCHASE OF B.C. HYDRO POWER ASSETS AND PURCHASE OF EXPANSION TO SEPTIMUS GAS PLANT
Monday, February 14, 2011
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
Trading Symbol: VSN
CALGARY, Feb. 14 /CNW/ - Veresen Inc. (TSX: VSN) announced today that it has completed the previously announced purchase from ENMAX Corporation of Calgary, Alberta, of interests in a portfolio of run-of-river hydroelectric facilities and development projects in B.C. The assets acquired include 33 megawatts ("MW") generated by three operating assets and rights to other development projects. The aggregate purchase price paid by Veresen Inc. to ENMAX is $114.9 million before closing adjustments, including working capital at closing and project debt of approximately $12 million. Veresen Inc. will finance the acquisition initially by drawing upon its revolving credit facility, but expects to put in place a term financing facility for the Clowhom hydroelectric project in the near future. A portion of Veresen Inc.'s obligations will be funded from equity raised under its Premium Dividend(TM) and Dividend Reinvestment Plan.
The interests 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 11 MW 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. >>
In addition, Veresen Inc. announced that Aux Sable Canada L.P., in which Veresen Inc. holds a 50% interest, has purchased a recently completed expansion to its Septimus Gas Plant near Taylor, B.C. The expansion, completed by Crew Energy Inc., increases the capacity of the Septimus Gas Plant from 25 mmcf/day to 60 mmcf/day. Aux Sable now owns 100% of the expanded Septimus facility. All of the gas and associated natural gas liquids produced from the plant flow onto the Septimus gas pipeline, which is also owned by Aux Sable. The Septimus gas pipeline interconnects with the Alliance Pipeline, in which Veresen Inc. also indirectly owns a 50% interest. Crew Energy will remain the operator of the Septimus Gas Plant.
Stephen White, President and CEO of Veresen Inc. commented "We are very pleased to complete the Enmax transaction and for Aux Sable to complete its acquisition of the expansion to the Septimus plant. The B.C hydro assets add to our growing portfolio of run-of-river power projects. This acquisition provides us with a long-term stream of contracted cash flows and contracted development upside, along with future development opportunities. Combined with our recent acquisitions of Pristine Power Inc. and Swift Power Corp., Veresen Inc. now has a material renewable power portfolio to complement our gas-fired power generation and district energy businesses. The purchase of the expansion to the Septimus Gas Plant is another important step in strengthening Aux Sable's business relationship with Crew Energy and advancing the strategic efforts of Alliance Pipeline and Aux Sable to expand their business footprint in the liquids rich Montney region."
Effective January 1, 2011, Fort Chicago Energy Partners L.P. converted from a limited partnership to a corporation named Veresen Inc. Veresen Inc. is a publicly traded dividend paying corporation based in Calgary, Alberta, that owns and operates energy infrastructure assets across North America. Its common shares and 5.75% convertible unsecured subordinated debentures, Series C due July 31, 2017 are listed on the Toronto Stock Exchange under the symbols "VSN" and "VSN.DB.C", respectively. Veresen Inc. 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 renewable and gas-fired facilities and development projects in Canada and the United States, and district energy systems in Ontario and Prince Edward Island. Veresen Inc. and each of its pipeline, NGL extraction and power businesses are also actively developing a number of greenfield investment opportunities. In the normal course of its business, Veresen Inc. and each of its businesses regularly evaluate and pursue acquisition and development opportunities.
Certain information contained herein relating to, but not limited to, Veresen Inc. 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 Veresen Inc. 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, the source of financing of the ENMAX transaction. Additional information on risks, uncertainties and factors that could affect Veresen Inc.'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 forgoing 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 Veresen Inc. 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. Veresen Inc. 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 Veresen Inc. 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 Genuity Corp.
For 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, Veresen Inc., Livingston Place, Suite 440, 222 - 3rd Avenue S.W., Calgary, AB, T2P 0B4, Phone: (403) 296-0140, Fax: (403) 213-3648, www.vereseninc.com