Torc acquires Pengrowth Energy Corp assets in Saskatchewan

TORC Oil & Gas Ltd. (TORC) announced the closing of its $510-million acquisition of low decline, high netback, light oil producing assets in southeast Saskatchewan from Pengrowth Energy Corp., and the strategic transition of the TORC's business model to an intermediate light oil producer paying sustainable dividends while also delivering disciplined per share production growth. The acquired assets are complementary to TORC's current light oil platform in the Cardium trend and the emerging play at Monarch and position TORC for sustainable dividends to shareholders while providing a balanced approach to disciplined growth.

In conjunction with the acquisition, TORC secured a cornerstone equity investment by the Canada Pension Plan Investment Board (CPPIB) for $170 million through a private placement of subscription receipts (the CPPIB investment) and completed a $242-million bought deal prospectus offering of subscription receipts. All subscription receipts issued pursuant to the CPPIB Investment and the prospectus offering have been converted to TORC common shares effective as of September 9, 2013.

TORC received the requisite shareholder and regulatory approval to effect a share consolidation on a 1 for 5 basis which was effected on September 10, 2013. The dividend has been initially set at $0.50 per share per annum (post share consolidation), payable monthly. The first dividend was paid to shareholders of record as at September 30, 2013 on October 15, 2013. To the extent permitted by the Income Tax Act (Canada), TORC intends to designate all dividends as "eligible dividends" for the purposes of the tax act.

TORC was represented on both the asset acquisition and the equity financing by James Pasieka, Tom Cotter and Mark Franko of McCarthy Tétrault LLP and Brian Bidyk of Davis LLP.

Pengrowth Energy Corp was represented by its in-house counsel, Andrew Grasby (senior vice president, general counsel and corporate secretary) and Hugo Potts (senior counsel).
The underwriters of the offering were represented by Burnet, Duckworth & Palmer LLP with a team of Alyson Goldman, Jacob Hoeppner and Jessica Brown.

Lawyer(s)

Jessica Brown Brian J. Bidyk Alyson F. Goldman Andrew Grasby Jacob Hoeppner Thomas N. Cotter Hugo Potts

Firm(s)

McCarthy Tétrault LLP Davis LLP Burnet, Duckworth & Palmer LLP