re: CANADIAN ABRAXAS PETROLEUM LTD. and SYSTEMS INC. CGGS CANADIAN GAS GATHERING An application by Canadian Abraxas Petroleum Ltd. and CGGS Canadian Gas Gathering Systems Inc. (the Applicants) for an Order declaring that section 99 of the Public Utilities Board Act, and section 99 of the Public Utilities Board Act to the extent that it may be incorporated into the Gas Utilities Act by operation of sections 50 and 51 of the Gas Utilities Act, does not apply to the Applicants with respect to a certain transaction. BEFORE: B. T. McManus, Q.C. Member FILE 6640-114 October 28, 1996
- 2 - A P P E A R A N C E S For the Applicants : Ms. JoAnn Ellis Burnet, Duckworth & Palmer : Ms. Patricia Quinton-Campbell Burnet, Duckworth & Palmer
- 3 - O R D E R The Alberta Energy and Utilities Board (the Board) hereby adopts as an Order, this report of B. T. McManus, the Member authorized pursuant to section 10 of the Alberta Energy and Utilities Board Act, S.A. 1994, c. A-19.5 and section 18 of the Public Utilities Board Act, R.S.A. 1980, c. P-37 to report on the matter; UPON THE APPLICATION by Canadian Abraxas Petroleum Ltd. and CGGS Canadian Gas Gathering Systems Inc. (the Applicants) to the Board for an Order declaring that section 99 of the Public Utilities Board Act, R.S.A. 1980, c. P-37 (the PUB Act), and section 99 of the PUB Act to the extent that it may be incorporated into the Gas Utilities Act, R.S.A. 1980, c. G-4 (the GU Act) by operation of sections 50 and 51 of the GU Act, does not apply to the Applicants with respect to a certain transaction, the particulars of which are set out in Schedule "A" attached to this Order (the Transaction); AND UPON READING: (1) the Application dated October 23, 1996; and (2) the Affidavit of Roger Bruton, sworn October 23, 1996, and the Affidavit of Ken Woolner, sworn October 24, 1996; AND UPON HEARING the Application at the Board's Calgary Offices on October 24, 1996;
- 4 - AND UPON HEARING Counsel for the Applicants; AND IT APPEARING that no other interested person has made any submission or objection with respect to the Application; AND WHEREAS, in the opinion of Counsel, the Transaction will constitute a "union" pursuant to the provisions of section 99 of the PUB Act; AND IT APPEARING that the Applicants are not designated utilities as listed in the Designation Regulations pursuant to section 91.1 of the PUB Act and section 25.1 of the GU Act; AND IT APPEARING that the Transaction will not adversely affect any member of the public of Alberta; AND WHEREAS the Board considers that, for the purposes of the Transactions, the public convenience and public interests do not reasonably require the application of section 99 of the PUB Act to the Applicants; THEREFORE, IT IS HEREBY DECLARED that, pursuant to section 71(1)(c) of the PUB Act, section 99 of the PUB Act does not apply to the Applicants for the purposes of the Transaction; AND IT IS FURTHER DECLARED that, pursuant to section 3(1)(c) of the GU Act, section 99 of the PUB Act to the extent that it may be incorporated into the GU Act by operation of sections 50 and 51 of the GU Act is also exempted for the purposes of the Transaction; AND IT IS HEREBY DECLARED that nothing in this Order shall bind, affect or prejudice the Board in its consideration of any other matter or question relating to any public utility owned, operated, managed or controlled by the Applicants. Dated at Calgary, Alberta this 28th day of October, 1996. MEMBER
- 5 - SCHEDULE "A" THE TRANSACTION Pursuant to the Share Sale Agreement dated October 1996, Canadian Abraxas Petroleum Limited (Canadian Abraxas) has agreed to purchase all of the issued and outstanding shares of CGGS Canadian Gas Gathering Systems Inc. (CGGS) specifically 2,813,738 Class A Shares and 937,910.6663 Class B shares for an aggregate price of $115 million (the unadjusted purchase price). The Transaction is conditional upon the sale of the Nevis Gas Plant to Morrison Petroleum Ltd. being completed pursuant to the Nevis Agreement referenced as Schedule 6.12 to the Share Sale Agreement. Canadian Abraxas will then complete the Transaction by acquiring all issued and outstanding shares of CGGS and CGGS will become a wholly-owned subsidiary of Canadian Abraxas.