Pump jacks pump oil at an Encana well near Standard, Alberta on May 12, 2014.TODD KOROL/The Globe and Mail
Jupiter Resources Inc.'s decision to pull a high-yield debt offering will not jeopardize its planned $2-billion acquisition of Western Canadian oil and gas assets from Encana Corp., its CEO says.
Jupiter, the newly formed private energy company, had planned to issue $1.1-billion (U.S.) of senior unsecured notes to help finance the purchase of Encana Corp.'s Bighorn properties, announced in June.
It has postponed the issue, citing "adverse market conditions."
"The notes offering has no impact on our ability to fund the acquisition nor on the timing. All the capital is already committed," Jupiter CEO Simon Bregazzi said in an email. "The notes offering just provided a potential opportunity to term out some of the debt if we found the terms of the offering attractive. Given the adverse market conditions at the end of last week we decided to wait."
Jupiter was founded by Apollo Global Management LLC, whose CEO told analysts this week that he anticipates Jupiter would close the deal as planned in the current quarter.
For its part, Encana also said it expects the transaction to close as scheduled. Encana is selling the west-central Alberta assets as part of a company-wide refocusing of resources on fewer resource plays.
Jeffrey Jones