Tudor, Pickering, Holt & Co., an energy investment bank is expanding its presence in the Canadian oil patch.Todd Korol/Reuters
Tudor, Pickering, Holt & Co., the U.S. energy investment bank, is expanding its presence in the Canadian oil patch despite the severe industry downturn that has forced a number of dealers out of the market.
TPH has hired some high-profile deal-makers from established bank-owned and boutique energy dealers, showing its aim to build up a credible franchise.
The expansion comes about 18 months after the firm opened an office in Calgary to serve the Canadian oil patch, headed by investment banker and former energy company executive Hilary Foulkes. The Houston-based firm also has offices in Denver, New York and London.
"We're very long-term thinkers. A plan to be global energy advisers has always been in TPH's strategy. Canada is clearly a big part of that strategy," Ms. Foulkes said in an interview. "The fact that we're in a market that is so stressed right now is not that material to the long-term business strategy, so we're sticking to our guns. We're going to build the right team. When there's business to be had, we'll do our best to execute it."
Energy-focused dealers have been hit hard in the oil-price collapse that began more than a year ago and shows no sign of letting up. Smaller investment houses, including Salman Partners, Octagon Capital and Global Hunter Securities, have either closed up altogether or left the Calgary market, as the merger deal flow and capital-raising businesses slowed.
Numerous oil and gas companies are marketing properties in hopes of using proceeds to pay down debt. According to Sayer Energy Advisors, 36 companies had assets on the market in Canada at the end of November. There have been a handful of large deals involving such asset sellers as Cenovus Energy Inc. and Canadian Natural Resources Ltd. But an expected deluge of mergers and acquisitions has been slow to build so far.
Ms. Foulkes declined to divulge the identities of the new hires at TPH Canada, citing confidentiality and "garden leave" cooling-off agreements that are standard among senior bankers.
However, industry sources said they include Richard Matthews, who recently left FirstEnergy Capital Corp., where he specialized in asset acquisitions and divestitures; and Derek Wheatley, who was managing director and institutional energy sales specialist at Scotia Capital.
A FirstEnergy representative said Mr. Matthews had resigned, but did not know where he was headed. Officials with Bank of Nova Scotia were not immediately available for comment before the New Year holiday.
TPH is adding personnel to cover a full suite of services, including capital markets, advisory as well as acquisitions and divestitures, said Ms. Foulkes, who was a senior executive at PennWest Petroleum before signing on with TPH in 2014 as its Canadian chair.
The key to flourishing is to have strong relationships with corporate decision-makers, she said.
"You can't underestimate the value of those relationships. You also need capability and creativity when it comes to managing through a cycle like the one we're in," she said. "Also, we're staffing our Canadian office with Canadians. We're not bringing people from outside the country to work in this community."
One industry-watcher said the firm's moves, including recruiting well-known professionals, show it is serious about building up its oil-patch business in Canada during the slowdown.
"Given that neither the energy sector nor the independent broker model are exactly in favour right now, the folks at Tudor Pickering must have one hell of a good pitch to be able to attract high-quality talent to an independent broker – a foreign one no less – whose only business is energy," said veteran Bay Street headhunter Joe Kan.
"A guy like Derek Wheatley doesn't just up and leave one of the best energy platforms in town, where he's probably making a comfortable annuity approaching seven figures, near the bottom of an oil cycle, to join just any startup."
Jeffrey Jones